London open: Stocks gain as BP results impress

London stocks rose in early trade on Tuesday, underpinned by solid results from oil giant BP and well-received updates from SSE and Bellway.

At 0835 GMT, the FTSE 100 was up 0.6% at 7,615.77.

Investors were digesting a survey showing that retail sales jumped last month, as shoppers sought out purchases ranging from watches to furniture.

According to the latest BRC-KPMG Retail Sales Monitor, total sales increased by 11.9% in January, compared to a 1.3% decline in January 2021, when the UK was in lockdown. On a year-on-two-year basis, total retail sales grew by 7.5%.

On a like-for-like basis, sales increased 8.1% compared to January 2021, when they rose 7.1%.

The British Retail Consortium said household appliances, electronics and homeware had performed well, as had furniture. Footwear and clothing, along with jewellery and watches, also performed strongly.

In comparison, food sales were muted, as restrictions brought in to tackle the spread of the Omicron variant were eased and people started eating out again.

In the three months to January, food sales decreased by 0.5% on a like-for-basis and by 0.1% on a total basis. That was below the 12-month total average growth of 2.4%.

Helen Dickinson, chief executive of the BRC, said: "It is encouraging to see such strong sales in January, even once inflation has been accounted for. Furniture was the stand-out performance, after transport delays in the Christmas period began to ease."

However, looking ahead she cautioned: "Retailers and consumers face challenges in the coming months.

"Retailers face competition from other spending opportunities, as the public flood back to restaurants, cafes and live events. Furthermore, rising inflation - driven by higher costs of production, higher energy and transport prices as well as other looming price hikes - will mean consumers will have to tighten their purse strings."

In equity markets, SSE rallied after it upgraded its full-year earnings expectations.

BP gushed higher after saying it swung to a huge annual profit, driven by surging oil and gas prices, but warned of lower production and flat refining margins in the first quarter of the current year.

Housebuilder Bellway was also in the black as it reported a solid first-half trading performance and strong underlying demand.

On the downside, online supermarket Ocado slid after it said its annual loss grew as increased investment in its solutions business more than offset higher revenue.

Airtel Africa tumbled after funds managed by Warburg Pincus and Morningstar Investment sold 58m shares in the telecommunications group in a placing.

DCC lost ground even as it said third-quarter profit rose in line with expectations as the sales and marketing group's energy and healthcare businesses grew.

Micro Focus slumped after the software company said it was on track to deliver its FY23 goals and posted a narrowing of its full-year losses but a decline in revenues.

Travel company Tui also fell despite saying it expects pent-up demand to drive summer holiday bookings towards pre-Covid pandemic levels as it narrowed losses and planned to repay some of the German state aid it received during the crisis.

In broker note action, St James's Place and M&G were both high risers after an upgrade to ‘overweight’ at Morgan Stanley.

BAE Systems was lifted by an initiation at ‘buy’ at Jefferies, while JD Sports was boosted by an upgrade at Exane BNP Paribas. However, retailers Marks & Spencer and WH Smith were both knocked lower by rating downgrades at Exane.

Market Movers

FTSE 100 (UKX) 7,615.77 0.56%
FTSE 250 (MCX) 21,843.57 0.21%
techMARK (TASX) 4,412.03 -0.16%

FTSE 100 - Risers

St James's Place (STJ) 1,563.50p 2.90%
Rio Tinto (RIO) 5,638.00p 2.21%
BP (BP.) 415.85p 1.87%
SSE (SSE) 1,572.50p 1.74%
BT Group (BT.A) 195.95p 1.73%
M&G (MNG) 216.00p 1.69%
Anglo American (AAL) 3,442.50p 1.61%
InterContinental Hotels Group (IHG) 4,943.00p 1.58%
B&M European Value Retail S.A. (DI) (BME) 550.00p 1.44%
Antofagasta (ANTO) 1,255.00p 1.34%

FTSE 100 - Fallers

Airtel Africa (AAF) 137.30p -11.42%
Ocado Group (OCDO) 1,289.50p -8.35%
DCC (CDI) (DCC) 6,372.00p -1.39%
Auto Trader Group (AUTO) 648.20p -0.98%
Rightmove (RMV) 636.60p -0.81%
Informa (INF) 555.40p -0.39%
Aveva Group (AVV) 2,862.00p -0.38%
London Stock Exchange Group (LSEG) 7,154.00p -0.31%
British Land Company (BLND) 535.80p -0.30%
Next (NXT) 7,176.00p -0.28%

FTSE 250 - Risers

Petropavlovsk (POG) 15.00p 3.31%
Virgin Money UK (VMUK) 201.40p 3.20%
Carnival (CCL) 1,447.20p 1.99%
Bellway (BWY) 2,894.00p 1.97%
Homeserve (HSV) 762.00p 1.94%
Ferrexpo (FXPO) 276.40p 1.92%
Impax Environmental Markets (IEM) 459.00p 1.77%
Balfour Beatty (BBY) 253.00p 1.77%
Wood Group (John) (WG.) 230.40p 1.72%
4Imprint Group (FOUR) 2,790.00p 1.64%

FTSE 250 - Fallers

Micro Focus International (MCRO) 415.70p -9.06%
TBC Bank Group (TBCG) 1,476.00p -2.51%
Molten Ventures (GROW) 768.00p -1.79%
Kainos Group (KNOS) 1,546.00p -1.72%
TUI AG Reg Shs (DI) (TUI) 256.00p -1.61%
Aston Martin Lagonda Global Holdings (AML) 1,114.50p -1.46%
Darktrace (DARK) 367.20p -1.08%
Discoverie Group (DSCV) 855.00p -0.93%
Softcat (SCT) 1,588.00p -0.87%
Bankers Inv Trust (BNKR) 114.20p -0.87%