Shell and Sainsbury's beat forecasts

London open

The FTSE 100 is forecast to extend its losses the previous day with a four-point fall.

Stocks to watch

Royal Dutch Shell’s first-quarter earnings on a current cost of supplies basis fell 58% from the previous year to $1.55bn as weak oil prices continued to take their toll, but the results were still better than analysts had expected. Chief executive Ben van Beurden said: “We continue to reduce our spending levels, to capture cost opportunities and manage the financial framework in today’s lower oil price environment. The combination with BG is off to a strong start, as a result of detailed forward planning before the completion of the transaction."

Federal prosecutors in Brazil have launched a $43bn lawsuit against BHP Billiton's part-owned Samarco Mineração mining unit to claim compensation for the dam disaster last November. BHP, which set up the Samarco joint venture with Brazil's Vale, said it had not received formal notice of the claim, which is for social, environmental and economic compensation in relation to the failure of the tailings dam at Samarco's iron ore operation in Minas Gerais.

Sainsbury's annual results showed the severe hit to its finances by the industry price war and ensuring food price deflation but profits fell less than analysts expected. Profits before tax slumped 14% to £587m but this was better than the consensus forecast of £575m, while like-for-like sales fell 0.9% to £25.8bn.

Poor but unpredictable sales in the year to date saw high street fashion retailer Next widen it guidance for the year in a trading update on Wednesday. The FTSE 100 firm said total sales from 31 January to 2 May were down 0.2%, with full-price sales down 0.9% - at the lower end of its full-year sales guidance of -1% to 4%. “We believe it is unlikely (but possible) that sales will deteriorate further, and we have seen a significant improvement over the last few days as temperatures have risen,” Next’s said.

Newspaper round-up

The Government has taken the rare move of fast-tracking a full investigation into BHS’s former directors as Sir Philip Green yesterday agreed to appear before MPs in return for saving his wife’s blushes. Business Secretary Sajid Javid has taken the unusual step of accelerating an inquiry by the Insolvency Service into the retailer’s collapse, rather than wait three months for administrators to conclude their own investigation.

Challenger banks face a bumpier ride and some are likely to be squeezed by rising competition, a report has warned. Despite notching up a more impressive record on growth, costs and conduct issues than their bigger rivals, challengers are about to have a tougher time, particularly the larger members of the pack, according to KPMG. - The Times

Barclays has become the first high street bank since the financial crisis to launch a 100 per cent mortgage in the latest sign of a return to riskier lending. The bank is allowing some buyers to take out a mortgage to 100 per cent of the value of the property, without needing a deposit, whereas most banks require at least a 5-10 per cent lump sum. - Financial Times

A Chinese government crackdown on the sale of data from its sprawling statistics agencies has prompted a marked deterioration in the numbers that investors rely on to understand the world’s second-largest economy. In recent months, executives searching for figures on China’s petroleum exports or wind power output have noticed growing gaps in the numbers, with some data released later than expected or missing entirely. - Financial Times

US close

US stocks fell on Tuesday after Chinese manufacturing data teamed up with a highly volatile dollar.

By the close, the Dow Jones Industrial Average was down 0.78% to 17,750.91, the S&P 500 was 0.87% lower at 2,063.37 and the Nasdaq composite had fallen 1.13% to 4,763.22.

China’s official manufacturing purchasing managers’ index dropped to 50.1 in April from 50.2 in March, the National Bureau of Statistics revealed, missing economists’ estimates of 50.4. However it was above the 50 level that separates an expansion from a contraction.