HSBC buying back another £1bn of shares, BHP Billiton more than doubles interim payout

London open

The FTSE 100 is expected to open 10 points lower on Tuesday, after closing flat at 7,299.86 on Monday.

Stocks to watch

HSBC threw in an extra £1bn share buyback and offered assurance of maintaining its dividend to try and keep investors as it reported a bigger than expected drop in annual profits. The largest company on the FTSE 100 delivered a reported profit before tax of $7.1bn that was down 62% on the prior year.

Australian mining giant BHP Billiton more than doubled its interim dividend payout as it reported a massive jump in underlying profits which were underpinned by a recovery in commodity prices and demand from China. The world's biggest miner said underlying first-half net profit to $3.24bn from $412bn in 2016. A first half dividend of 40 cents was declared, up from 16 cents, a 10 cent increase over policy that links payouts to results. The dividend would be covered by free cash flow, the company said. It also announced a $2.5bn bond buyback.

Building materials firm Wolseley is to merge its Swiss plumbing and heating business with Walter Meiro, a Swiss heating and ventilation and air conditioning distributor. If the merger is completed, Wolseley will receive SFr 117.8m and a 39.2% stake in the new business.

As part of its year-end close process, Capita said on Tuesday it has undertaken a comprehensive review across its major contracts, and as a result management has decided to impair, at year end 2016, a number of historic assets relating to a few specific contracts, which were being amortised over their contract life. The FTSE 100 firm said the treatment was consistent with how contracts had been accounted for in 2016, and these impairments would have no adverse impact on cash or future trading. Assets amounting to around £50m will be written off as a non-underlying charge consistent with prior year treatment, and accrued income of around £40m will be written down as a charge to underlying results, also consistent with prior year treatment.

Newspaper round-up

Philip Hammond has signalled that the government is looking at alleviating the impact of changes to business rates, which have triggered a fierce backlash among some Conservative MPs. The chancellor told his party’s influential 1922 committee that he was in “listening mode” over the policy, which will see rates rise by 13% in his own Runnymede and Weybridge constituency. - Guardian

Saudi Arabia’s plans to float off a stake in the nation’s state oil producer have been delayed until next year at the earliest because of the complexity of the transaction. Saudi Aramco was due to present a plan for its initial public offering this week to Salman bin Abdulaziz al-Saud, the king of Saudi Arabia. - The Times

The European Commission wants Britain to be paying into EU projects for four years after it has signed a Brexit deal, with final payments continuing up until the end of 2023. The plan is part of a European Union demand that Britain settles a €60bn “Brexit bill” before being granted a deal that will govern future trade relations. - Telegraph

Greece’s bailout inspectors are returning to Athens to seek changes to the country’s tax, pensions and labour market laws in a sign that the Greek prime minister, Alexis Tsipras, will give way to European pressure for deeper reforms. His government agreed at a meeting of eurozone finance ministers on Monday to talks on big economic reforms in exchange for progress on releasing the next instalment of bailout funds. - Guardian

Political pressure over the London Stock Exchange’s £21bn merger with German rival Deutsche Boerse is mounting ahead of a parliamentary debate on the controversial tie-up, amid concerns a major City institution will become “locked in the EU” following Brexit. Sir Bill Cash, the veteran eurosceptic Conservative MP, has secured a debate which will lead to fierce scrutiny of the deal and some MPs are expected to urge the Government to put a stop to the merger. - Telegraph

US close

Markets in the US were closed on Monday for Presidents Day. On Friday, the Dow Jones Industrial Average closed up 0.02% at 20,624.05, while the S&P 500 added 0.17% to 2,351.16 and the Nasdaq 100 finished 0.45% higher at 5,324.72.