London open: Stocks gain as BP rallies on share buybacks

London stocks rallied in early trade on Tuesday, with BP pacing the gains as the oil giant expanded its share buybacks.

At 0830 GMT, the FTSE 100 was up 1% at 7,686.51.

Investors were also mulling the latest data from BRC and KPMG, which showed that the annual rate of UK retail sales growth slowed to its lowest level in 17 months in January as non-food sales dropped despite an easing of inflationary price pressures.

Total retail sales were up by just 1.2% compared with January 2023, easing from the 1.7% year-on-year growth registered in December and the 2.7% annual increase seen in November, according to the British Retail Consortium-KPMG retail sales monitor.

The last time year-on-year growth was below this level was in August 2022 when it was just 1.0%.

"Easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month," said the BRC's chief executive Helen Dickinson.

"Larger purchases, such as furniture, household appliances, and electricals, remained weak as the higher cost of living continued into its third year," Dickinson said.

"The milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear. It was better news for health and beauty products, which continued to sell extremely well."

Food sales were up 6.3% year-on-year over the three months to January, slowing from 6.8% growth registered in the three months to December, while non-food sales fell 1.8% compared with a 1.5% decline previously.

Dickinson called on the government to prioritise the needs of retailers and their customers ahead of the Spring Budget and the next general election expected at some point in the second half of 2024.

"Employing three million people and supporting families and communities in every corner of the country, retail is the ‘everywhere economy’. By addressing the cumulative burdens, from business rates’ rises, to ill-conceived new recycling proposals to border control costs, the next government can unlock retail investment and boost local and national economic growth."

Still to come, the S&P Global/CIPS construction PMI for January is due at 0930 GMT.

In equity markets, BP surged to the top of the FTSE 100 as the energy giant announced a $1.75bn share buyback despite a slump in annual profits as oil prices fell during 2023 from the spike caused by Russia's invasion of Ukraine.

Full-year underlying replacement cost profit - the company's preferred earnings measure - halved to $13.8bn from $27.6bn a year earlier. Looking ahead, BP expects first quarter 2024 reported upstream production to be higher compared to the final three months of the 2023.

Renishaw gained as it said that higher costs, pay inflation and currency movements hit margins in the first half, leading to a 23% slump in adjusted profits amid challenging market conditions, but that it expects things to pick up in the second half.

Banking group Virgin Money also advanced saying it had delivered a first-quarter performance in line with guidance with growth in new accounts, deposits and target lending activities at stable margins.

On the downside, Entain fell after Barclays downgraded the shares to ‘equalweight’ from ‘overweight’ as it said the stock appears cheap but the risk/reward is fairly balanced.

Market Movers

FTSE 100 (UKX) 7,686.51 0.97%
FTSE 250 (MCX) 19,093.60 0.39%
techMARK (TASX) 4,388.55 0.56%

FTSE 100 - Risers

BP (BP.) 482.20p 6.18%
Prudential (PRU) 844.20p 3.23%
Antofagasta (ANTO) 1,756.50p 2.09%
Kingfisher (KGF) 213.90p 1.81%
Sainsbury (J) (SBRY) 277.30p 1.76%
Anglo American (AAL) 1,841.00p 1.71%
M&G (MNG) 222.40p 1.65%
Rio Tinto (RIO) 5,433.00p 1.57%
BAE Systems (BA.) 1,197.50p 1.57%
Scottish Mortgage Inv Trust (SMT) 782.80p 1.53%

FTSE 100 - Fallers

Ocado Group (OCDO) 518.20p -0.92%
Airtel Africa (AAF) 105.70p -0.75%
Pearson (PSON) 962.80p -0.60%
Entain (ENT) 985.40p -0.44%
British American Tobacco (BATS) 2,371.00p -0.29%
SSE (SSE) 1,674.50p -0.27%
London Stock Exchange Group (LSEG) 8,810.00p -0.18%
Coca-Cola HBC AG (CDI) (CCH) 2,321.00p -0.17%
GSK (GSK) 1,660.00p -0.16%
Fresnillo (FRES) 504.60p -0.04%

FTSE 250 - Risers

Renishaw (RSW) 3,552.00p 3.38%
Ithaca Energy (ITH) 134.00p 3.24%
Fidelity China Special Situations (FCSS) 187.80p 2.51%
Templeton Emerging Markets Inv Trust (TEM) 149.00p 2.05%
Bank of Georgia Group (BGEO) 3,820.00p 2.00%
NextEnergy Solar Fund Limited Red (NESF) 83.30p 1.96%
Grafton Group Ut (CDI) (GFTU) 964.60p 1.91%
Harbour Energy (HBR) 262.40p 1.74%
SDCL Energy Efficiency Income Trust (SEIT) 52.70p 1.74%
Virgin Money UK (VMUK) 152.10p 1.60%

FTSE 250 - Fallers

Marshalls (MSLH) 283.00p -2.21%
Hill and Smith (HILS) 1,826.00p -2.04%
Playtech (PTEC) 443.60p -1.64%
TBC Bank Group (TBCG) 2,830.00p -1.39%
Tyman (TYMN) 289.50p -1.36%
Helios Towers (HTWS) 76.00p -1.23%
JPMorgan Japanese Inv Trust (JFJ) 502.00p -1.18%
Wood Group (John) (WG.) 154.00p -0.96%
Wizz Air Holdings (WIZZ) 2,148.00p -0.92%
Ferrexpo (FXPO) 87.55p -0.91%