London open: Stocks edge up as BP, HSBC report; Budget eyed

London stocks edged higher in early trade on Tuesday as investors digested results from the likes of HSBC and BP and looked ahead to the Budget.

At 0830 GMT, the FTSE 100 was up 0.2% at 8,299.70.

Data released earlier by the British Retail Consortium showed that shop price deflation accelerated in October, with the BRC urging the chancellor to take action to keep prices low.

Prices at UK tills were 0.8% lower than 12 months ago, compared with a 0.6% year-on-year fall in September, according to the BRC/NielsenIQ Shop Price Index for October.

This was the third straight month of annual deflation and lowest rate of change since August 2021.

Non-food prices fell by 2.1%, unchanged from the previous month, while food prices grew by 1.9%, down from 2.3% previously, with fresh food inflation in particular slowing to 1.0% from 1.5%.

The BRC said that food inflation eased as retailers stepped up their seasonal deals, while non-food items like electrical and DIY products were priced lower as retailers capitalised on the recent pick-up in the housing market.

"Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation," said BRC chief executive Helen Dickinson.

"Retail is already paying more than its fair share of taxes compared to other industries. The chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20% downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment."

In equity markets, HSBC rallied as it announced another $3bn share buyback and posted better-than-expected third-quarter profits, underpinned by solid performances from the wealth and investment banking units.

In the three months to the end of September, pre-tax profit rose 10% on the same period a year earlier to $8.5bn, versus analysts’ expectations of $7.6bn.

HSBC said revenue increased 5% to $17bn, reflecting higher customer activity in its wealth products, supported by volatile market conditions.

Net interest income fell by $1.6bn to $7.6bn, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities.

HSBC announced a major overhaul last week, saying it would divide its business into eastern and western markets in order to simplify its structure.

Educational publisher Pearson gained as it reiterated its full-year outlook after an uptick in quarterly sales.

Updating on trading, the blue chip said sales rose 4% in the third quarter and by 2% in the year to date. Underlying sales growth, which strips out businesses under strategic review, was 5% and 3% respectively over the two periods.

Driving the uplift was a 6% jump in sales in Pearson’s core assessment and qualifications division, and in workforce skills. Sales strengthened 4% in virtual learning and by 4% in higher education.

On the downside, BP fell as it reported a slide in quarterly profits, hit by weaker refining margins, although the decline was not as steep as feared.

Underlying replacement cost profit, a key measure for the oil and gas major, was $2.3bn in the third quarter. That was down on both the second quarter’s $2.8bn, and last year’s $3.3bn.

BP said the results reflected weaker refining margins, a weak oil trading result and lower liquids realisations, although they were partly offset by higher gas realisations.

Hargreaves Lansdown was little changed as it reported assets under administration of £157.3bn for the quarter ended 30 September, with growth driven by £1.5bn in positive market movements and £0.5bn in net new business.

Market Movers

FTSE 100 (UKX) 8,299.70 0.17%
FTSE 250 (MCX) 20,806.54 -0.14%
techMARK (TASX) 4,747.69 0.08%

FTSE 100 - Risers

HSBC Holdings (HSBA) 715.10p 3.32%
Standard Chartered (STAN) 880.00p 1.64%
Pearson (PSON) 1,087.50p 1.49%
Prudential (PRU) 657.00p 0.77%
Reckitt Benckiser Group (RKT) 4,884.00p 0.72%
Intermediate Capital Group (ICG) 2,164.00p 0.65%
CRH (CDI) (CRH) 7,286.00p 0.61%
InterContinental Hotels Group (IHG) 8,614.00p 0.44%
Aviva (AV.) 467.50p 0.39%
Frasers Group (FRAS) 806.00p 0.37%

FTSE 100 - Fallers

Airtel Africa (AAF) 107.20p -2.19%
easyJet (EZJ) 512.00p -1.61%
Anglo American (AAL) 2,431.50p -1.28%
International Consolidated Airlines Group SA (CDI) (IAG) 212.70p -1.21%
Vodafone Group (VOD) 73.08p -1.11%
Flutter Entertainment (DI) (FLTR) 17,325.00p -0.92%
BP (BP.) 395.45p -0.91%
Melrose Industries (MRO) 482.50p -0.84%
Antofagasta (ANTO) 1,793.50p -0.75%
Smurfit Westrock (DI) (SWR) 3,467.00p -0.74%

FTSE 250 - Risers

TBC Bank Group (TBCG) 2,675.00p 3.48%
Kainos Group (KNOS) 864.00p 2.98%
Bridgepoint Group (Reg S) (BPT) 339.00p 2.48%
Elementis (ELM) 140.80p 1.88%
Currys (CURY) 86.40p 1.83%
Bytes Technology Group (BYIT) 480.00p 1.69%
W.A.G Payment Solutions (WPS) 83.20p 1.46%
AO World (AO.) 112.00p 1.45%
Bloomsbury Publishing (BMY) 726.00p 1.40%
Bank of Georgia Group (BGEO) 3,820.00p 1.19%

FTSE 250 - Fallers

St James's Place (STJ) 823.00p -3.06%
Helios Towers (HTWS) 109.40p -2.67%
Burberry Group (BRBY) 769.60p -2.19%
Wizz Air Holdings (WIZZ) 1,359.00p -2.02%
Grafton Group Ut (CDI) (GFTU) 1,000.20p -1.77%
Empiric Student Property (ESP) 94.00p -1.57%
Foresight Group Holdings Limited NPV (FSG) 451.00p -1.53%
4Imprint Group (FOUR) 5,180.00p -1.33%
OSB Group (OSB) 366.20p -1.29%
Hays (HAS) 78.55p -1.26%