Provident Financial maintains dividend, SFO launches Rio Tinto corruption probe

London open

The FTSE 100 is expected to open 35 points higher on Tuesday, after closing down 1.01% at 7,377.73 on Monday.

Stocks to watch

Kumba Iron Ore, which is majority owned by FTSE 100 mining giant Anglo American, reported headline earnings of ZAR 4.6bn (£272.58m) for the six months to 30 June on Tuesday. Anglo American said it would report underlying earnings in respect of Kumba Iron Ore of $210m for the half-year period, taking into account “certain adjustments”.

Half year pre-tax profits at speciality chemical company Croda rose 15.8% to £168m boosted by currency tailwinds as sales increased 16.2% to £707.3m. “Sterling exchange rates are now largely consistent with the prior year and, if unchanged, would not therefore repeat the first half year benefit of currency translation on sales and profit,” the company said.

Sub-prime lender Provident Financial has maintained its dividend despite reporting a 46% fall in statutory first-half profits, which it blamed entirely on the disruption from reorganising its home credit business to a self-employed model. Attempting to allay the market's concerns after several Bank of England warnings in recent months about its concerns for consumer credit, the FTSE 100 company assured that it will "continue to exercise strong discipline around credit and has not observed changes in customer behaviour in relation to either demand for credit or credit performance in any of its businesses".

The Serious Fraud Office has launched a corruption probe into Rio Tinto’s activities in Guinea. Last November the mining giant turned itself into authorities over worries about the Simandou iron ore project in the west African country and alleged multi-million pound bribery payments made to a contractor in 2011. "The SFO has opened an investigation into suspected corruption in the conduct of business in the Republic of Guinea by the Rio Tinto group, its employees and others associated with it," the organisation said overnight.

Newspaper round-up

The Bank of England has told banks, credit card companies and car loan providers that they risk fresh action against reckless lending as it warned of a looming “spiral of complacency” about mounting consumer debt. In its toughest warning yet about the possibility of a rerun of the financial crisis that devastated the economy 10 years ago, Threadneedle Street admitted it was alarmed about the increase in the amount of money being borrowed on easy terms over the past year. - Guardian

Saudi Arabia’s efforts to shore up global oil prices ahead of the planned listing of Saudi Aramco was met with a shrug from the markets as traders kept their eyes on US shale. The world’s largest oil producer pledged to cut deeper into its export volumes and take a tougher stance against countries which fail to stick to their agreed targets. - Telegraph

Builders are to be banned by the government from selling houses as leasehold in England and ground rents on flats could be cut to zero following widespread outrage over exploitative contracts. In a blow for major housebuilders such as Taylor Wimpey and Persimmon, communities secretary Sajid Javid will on Tuesday set out plans to “ban new-build houses being sold as leasehold as well as restricting ground rents to as low as zero”. - Guardian

A shortage of industrial space is threatening to curb British manufacturing after UK businesses experienced a post-Brexit vote boom brought about by the weakened pound. The UK has a little over one year’s worth of industrial space left thanks to a rush to secure new or larger premises by British companies, according to new data from real estate advisers Colliers International. - Telegraph

A raft of top European companies will be forced to pull out of the Nord Stream 2 gas pipeline project with Russia or face crippling sanctions under draconian legislation racing through the US Congress. Berlin and Brussels have threatened retaliation if Washington presses ahead with penalties on anything like the suggested terms, marking a dramatic escalation in the simmering trans-Atlantic showdown over America’s extraterritorial police powers. - Telegraph

The transport secretary, Chris Grayling, has declared his support for Crossrail 2, alleviating fears in London that the project could be shelved but sparking anger outside the capital after he announced last week that rail electrification schemes would be cut elsewhere. Grayling’s call for a fresh public consultation on Crossrail 2, a new commuter rail line running north-south across the capital, was greeted with relief by the London mayor, Sadiq Khan, who said the project was “essential for the future prosperity” of the capital. - Guardian

US close

US stocks finished mixed on Monday as investors awaited corporate news from the likes of Alphabet ahead of what promises to be a busy week on the earnings front.

The Dow Jones Industrial Average was down 0.31% at 21,513.17 and the S&P 500 was off 0.11% at 2,469.91, while the tech-heavy Nasdaq 100 finished 0.34% higher at 5,941.37.

“The Dow is staring at a very busy earnings calendar, the highlight being tonight’s second quarter report from Google parent Alphabet,” said Spreadex analyst Connor Campbell.

“As for the greenback, Wednesday sees the month’s Federal Reserve meeting, with the currency on the lookout for any hawkish hints to help rescue it from a sour summer."

On the data front, Markit's flash US manufacturing purchasing managers' index came in at a four-month high in July.

The manufacturing index rose to 53.2 from 52.0 the month before amid accelerated growth in output, new orders, employment and stocks of inputs.