London pre-open: Stocks seen lower; BHP Billiton slashes dividend

London stocks are expected to open lower on Tuesday following a negative session in Asia, amid mixed oil prices.

The FTSE 100 is seen starting 40 points lower than Monday’s close at 5,997.

“On Tuesday, European markets look to pullback from those gains alongside a dip in the price of oil as China stocks fall and mining giant BHP Billiton slashes its dividend,” said CMC Markets’ Jasper Lawler.

“The close relationship between equities and oil this year is one of the chicken and the egg. Economists have been scratching their heads because a lower oil price should be an economic stimulus and be positive for stocks. What is actually happening is that oil and share prices are not moving to economics but simply represent markets where risk is either on or off. This rapid switching between risk on and off (high volatility) all comes back to the attempted withdrawal of unprecedented monetary stimulus from the Federal Reserve.”

There are no major UK data releases due but in the US, S&P Case-Shiller house prices are at 1400 GMT, while consumer confidence and existing home sales are at 1500 GMT.

BHP Billiton slashes dividend by 75%

After absorbing a half-year loss of US$5.67bn, BHP Billiton slashed its dividend by three-quarters and adopted a new more cautious policy as it hunkered down for what it believes will be a prolonged period of low and volatile commodity markets.

The Anglo-Australian colossus also cut its capital and exploration spending by 40% to $3.6bn, which combined to help trim its half-time net debt to $25.9bn in line with consensus forecasts.

Persimmon has increased its full year underlying profit before tax by 34% to £637.8m.

In the FTSE 100 housebuilder’s results for the year to 31 December 2015, it said revenue had also risen 13% to £2.9bn, driven by an 8% increase in legal completions rising to 14,572, and a 4.5% increase in the average selling price to £199,127.

“This strong growth results from working hard to open new outlets as quickly as possible following receipt of an implementable planning consent and from actively managing build programmes to secure improved rates of new home construction on every development site to meet demand,” said chairman Nicholas Wrigley.

Steady sailing was the theme of the year at GKN, with the company reporting growth in sales and earnings across most of its operations on Tuesday.

Sales at the FTSE 100 firm increased 4% through the year to 31 December to £7.23bn, from £6.98bn, with the board citing good growth in Automotive and Aerospace, though Land Systems was down in what it called a tough market.

The company's trading margin remained unchanged at 9.2%, excluding the recently-acquired Fokker Technologies, with a 10.9% increase in reported profit before tax to £245m, from £221m.

Earnings per share were up 15% to 11.8p, with the company announcing a dividend per share of 8.7p - a 4% increase.