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London open: Stocks edge up as BP’s thrid quarter impresses
London stocks edged up in early trade on Tuesday, with sentiment underpinned by a strong set of earnings from BP.
At 0830 BST, the FTSE 100 was up 0.2% to 7,038.58, while the pound was down 0.2% against the dollar and the euro at 1.2771 and 1.1232, respectively.
Trade relations between the US and China were back in focus again after US President Trump said he expects a “great deal” with China, but threatened more tariffs – on another $257bn worth of goods – if a deal isn’t agreed.
In UK corporate news, Ocado was the standout gainer as it said it expects to receive orders for the first three online delivery warehouses from US grocery giant Kroger before the end of the year after the pair signed a formal services and operational agreement.
BP rallied as the oil giant enjoyed its best quarterly result in more than five years as profits gushed much higher than expected in the third quarter thanks to strong oil prices.
Richard Hunter, head of markets at Interactive Investor, said: “BP has set the bar high for the oil majors in general, delivering a blockbuster set of earnings which have comfortably outpaced expectations.
“These numbers reflect a business which is back on its game and the initial share price reaction is understandably positive. This adds to some strength over the last year, during which time the shares have risen 7.5%, as compared to a 6% decline in the wider FTSE 100.”
WH Smith racked up strong gains after announcing the acquisition of US airport retailer InMotion for £155m. The deal is expected to double WH Smith’s international travel business and should add to earnings per share in the first year after completion.
AstraZeneca rose as it agreed to sell certain rights to two drugs for $815m, while Polymetal nudged up after agreeing to sell its Kapan mine in Armenia to Chaarat Gold Holdings for £$55m.
Online trading platform IG Group was in the green as it appointed former Verifone executive June Felix as its new chief executive officer with immediate effect.
On the downside, Reckitt Benckiser was the worst performer on the FTSE 100 after the consumer goods giant posted a 2% rise in third-quarter like-for-like sales, missing consensus expectations for a 4% increase as its European Infant Formula and Child Nutrition plant was hit by a temporary manufacturing disruption.
In broker note action, Electrocomponents was lifted to ‘neutral’ at Credit Suisse, while Travis Perkins was raised to ‘equalweight’ by Barclays.
Antofagasta was lifted to ‘neutral’ from ‘sell’ by UBS, while Drax was hit by a downgrade to ‘hold’ from ‘buy’ at Jefferies.
