London close: Stocks close higher as investors cheer BP dividend decision
London stocks managed to close positive on Tuesday, with BP shares rising even further through the afternoon as the oil major maintained its dividend, despite a slide in quarterly profits.
The FTSE 100 ended the session up 1.91% at 5,958.50 and the FTSE 250 was 2.12% firmer at 16,291.58.
Sterling was mixed against its major trading pairs, last rising 0.1% on the dollar to $1.2444, while slipping 0.02% against the euro to €1.1477.
“Further gains for the FTSE 100 look odd on a morning when major components like BP and HSBC report poor earnings, but for the most part the gainers in the index are those that will see an upturn in activity as lockdowns ease across most of the globe, if perhaps not yet in the UK,” said Chris Beauchamp, chief market analyst at IG.
“This continues the theme from yesterday’s session, when it seemed as if the whole world was looking to a post-coronavirus environment, when some semblance of normality may return.
“As with US earnings season, the numbers contained within BP’s and HSBC’s updates mostly related to the recent past, which perhaps accounts for the limited downside reaction in their share prices."
BP reversed earlier losses to finish up 2.58% as it posted a 66% slump in first-quarter profits due to collapsing oil prices and "demand destruction" caused by the coronavirus pandemic but said it had decided to retain a dividend.
"The decision to hold on to the dividend at BP has also proven to be a positive surprise, the firm likely judging that the hit to its cash pile is outweighed by the headline risks to confidence that could follow should one of the UK’s big dividend firms have to cut back its payout," said Beauchamp.
Retailer Marks & Spencer was ahead 3.29%, also reversing morning losses, despite saying that it does not expect to pay a dividend for the 2021 financial year.
That came even as data from the Confederation of British Industry showed that retailers suffered their worst fall in sales since the 2008 financial crisis in the first half of April amid the lockdown.
The CBI Distributive Trades Survey recorded the sharpest fall in sales in the year to April since December 2008, with a balance of -55% compared to -3% in March, making for the joint lowest balance since the survey began.
Every sub-sector reported a negative balance, with grocers tumbling from 94% to -27%, and specialist food and drink falling to -4% from 42%, as lockdown measures were introduced and stockpiling eased.
Retailers also expect a similar pace of decline next month, with a balance of -54% the weakest expectation on record.
“It is no surprise that lockdown is hitting retailers hard,” said Rain Newton-Smith, the CBI’s chief economist.
“Two fifths have shut up shop completely for now, and sales of groceries and other essentials also feel, suggesting households may have been dipping into stockpiles or tightening their belts.”
Elsewhere, HSBC’s London shares managed to sneak above the waterline late in the session, closing up 1.02% after the bank said first-quarter profit almost halved as revenue fell.
It also set aside $3bn for credit losses after the Covid-19 crisis took its toll on financial performance.
Pre-tax profit for the three months to the end of March dropped 48% to $3.2bn from a year earlier as revenue fell 5% to $13.7bn.
Market Movers
FTSE 100 (UKX) 5,958.50 1.91%
FTSE 250 (MCX) 16,291.58 2.12%
techMARK (TASX) 3,563.36 0.70%
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 33.25p 8.88%
JD Sports Fashion (JD.) 522.60p 8.54%
Informa (INF) 453.60p 8.49%
Carnival (CCL) 996.40p 8.02%
Legal & General Group (LGEN) 205.00p 7.61%
RSA Insurance Group (RSA) 370.60p 7.39%
Barclays (BARC) 97.76p 7.36%
Prudential (PRU) 1,113.00p 7.07%
Royal Bank of Scotland Group (RBS) 115.05p 7.02%
Hargreaves Lansdown (HL.) 1,600.00p 6.14%
FTSE 100 - Fallers
easyJet (EZJ) 572.20p -2.85%
Evraz (EVR) 246.90p -2.45%
Fresnillo (FRES) 704.20p -2.03%
Reckitt Benckiser Group (RB.) 6,454.00p -1.91%
Hikma Pharmaceuticals (HIK) 2,323.00p -1.40%
AstraZeneca (AZN) 8,188.00p -1.23%
International Consolidated Airlines Group SA (CDI) (IAG) 217.90p -1.00%
GlaxoSmithKline (GSK) 1,687.60p -0.90%
DCC (DCC) 5,520.00p -0.83%
Unilever (ULVR) 4,071.00p -0.76%
FTSE 250 - Risers
Cineworld Group (CINE) 63.36p 17.07%
Micro Focus International (MCRO) 450.50p 15.31%
Wood Group (John) (WG.) 175.00p 10.55%
Petrofac Ltd. (PFC) 168.55p 9.84%
Pantheon International (PIN) 1,944.00p 9.55%
Games Workshop Group (GAW) 5,805.00p 9.12%
Virgin Money UK (VMUK) 79.34p 9.07%
OneSavings Bank (OSB) 236.00p 8.96%
IP Group (IPO) 54.40p 8.91%
PayPoint (PAY) 634.00p 8.01%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 55.05p -5.66%
Centamin (DI) (CEY) 162.55p -3.16%
Avon Rubber (AVON) 2,645.00p -3.11%
Avast (AVST) 439.60p -2.79%
QinetiQ Group (QQ.) 308.80p -2.77%
Greencoat UK Wind (UKW) 135.20p -2.58%
Serco Group (SRP) 130.60p -2.39%
Genus (GNS) 3,584.00p -2.24%
Hochschild Mining (HOC) 131.40p -2.23%
Hill & Smith Holdings (HILS) 1,102.00p -2.13%