London open: Stocks nudge lower but BP gains after results

London stocks nudged lower in early trade on Tuesday as traders returned to their desks after the Bank Holiday weekend, with results from oil giant BP in focus.

At 0855 BST, the FTSE 100 was down 0.1% at 7,533.91.

Victoria Scholar, head of Investment at Interactive Investor, said: "European markets are trading higher with oil and gas at the top of the basket. The FTSE 100 is playing catch up after the long weekend, bucking the trend for broader strength to shed more than 50 points, breaking back below support turned resistance at 7,500. However, BP is outperforming, trading near the top of the basket after reporting its best quarterly profits in a decade.

"The 10-year US treasury yield hit 3% for the first time in over three years, doubling since the start of the year as the market gets set for the Fed’s two-day policy meeting which kicks off tomorrow and should result in a 50-basis point rate hike as well as some clarity around its own economic outlook via its projections.

"In a week focused on central bank action, the Bank of England is expected to follow suit with another rate hike on Thursday, lifting rates to the highest level since 2009. Plus, overnight in Australia, the RBA lifted its official cash rate to 0.35% in first rise since 2010 in a week that highlights the global inflationary pressures and the broad shift from monetary accommodation to monetary tightening."

In equity markets, BP gained ground even as it said it swung to a massive first-quarter loss as a result of its decision to exit Russia after the country's invasion of Ukraine. Analysts said investors were encouraged by better-than-expected underlying profits.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘"$20.4bn is an eye-watering quarterly loss for BP but it’s far from unexpected. The market had already factored in a huge hit due to its Russia exit and now the company has unveiled the price to pay is a big and bold $25.5bn. That’s the amount it has set aside in pre-tax charges and the cost of extricating itself from Rosneft.

"But surprising on the upside is the boost to underlying profits which came in at $6.2bn, sharply higher than the consensus expected of around $4.5bn. The company has been raking in cash as the supply squeeze on oil markets has intensified. The war and the high geopolitical tensions have brought about a surge in the oil price which is up 40% since the start of the year, spiking in the first weeks of the war at $139."

Elsewhere, Avast was fell after the cybersecurity firm said it expected annual revenue to slow and margins to be squeezed amid a "challenging global backdrop".

In broker note action, M&G and St James’s Place both rallied after upgrades to ‘buy’ at HSBC.

Meanwhile, AO World was knocked lower by a downgrade to ‘underweight’ at JPMorgan, but Auction Technology was lifted by an upgrade to ‘overweight’ by the same outfit.

Market Movers

FTSE 100 (UKX) 7,533.91 -0.14%
FTSE 250 (MCX) 20,712.08 0.02%
techMARK (TASX) 4,382.86 0.22%

FTSE 100 - Risers

M&G (MNG) 221.30p 3.31%
Kingfisher (KGF) 260.20p 2.72%
Taylor Wimpey (TW.) 130.20p 2.60%
Associated British Foods (ABF) 1,648.00p 2.58%
Sainsbury (J) (SBRY) 239.30p 2.57%
Legal & General Group (LGEN) 257.90p 2.30%
Whitbread (WTB) 2,881.00p 2.27%
Barclays (BARC) 151.56p 2.27%
BP (BP.) 400.40p 2.26%
B&M European Value Retail S.A. (DI) (BME) 500.20p 2.04%

FTSE 100 - Fallers

SEGRO (SGRO) 1,274.00p -5.10%
Endeavour Mining (EDV) 1,914.00p -2.30%
Unilever (ULVR) 3,652.00p -1.80%
Glencore (GLEN) 488.85p -1.70%
British American Tobacco (BATS) 3,299.00p -1.58%
Dechra Pharmaceuticals (DPH) 3,582.00p -1.54%
Royal Mail (RMG) 339.90p -1.36%
United Utilities Group (UU.) 1,136.00p -1.30%
Halma (HLMA) 2,443.00p -1.29%
Antofagasta (ANTO) 1,531.00p -1.29%

FTSE 250 - Risers

Auction Technology Group (ATG) 931.00p 5.92%
Network International Holdings (NETW) 269.80p 3.45%
Marks & Spencer Group (MKS) 142.30p 3.30%
Man Group (EMG) 242.60p 3.23%
Abrdn Private Equity Opportunities Trust (APEO) 520.00p 3.17%
Wizz Air Holdings (WIZZ) 3,261.00p 2.71%
Moneysupermarket.com Group (MONY) 178.90p 2.23%
Tate & Lyle (TATE) 798.90p 2.20%
Vistry Group (VTY) 853.00p 1.97%
Dr. Martens (DOCS) 217.20p 1.97%

FTSE 250 - Fallers

Tritax Big Box Reit (BBOX) 236.00p -3.20%
Impax Environmental Markets (IEM) 430.00p -2.82%
Indivior (INDV) 305.80p -2.36%
Playtech (PTEC) 513.00p -2.10%
Weir Group (WEIR) 1,527.00p -2.05%
Tullow Oil (TLW) 55.15p -2.04%
Savills (SVS) 1,062.00p -1.94%
LondonMetric Property (LMP) 264.80p -1.78%
JTC (JTC) 768.00p -1.66%
Hill & Smith Holdings (HILS) 1,362.00p -1.59%