BP leaves dividend unchanged, Ofcom wants BT-Openreach split

The FTSE 100 is expected to open 24 points higher on Tuesday, after closing down 0.3% at 6,710.13 on Monday.

Stocks to watch

BP reported an unchanged dividend as it reduced the level of statutory losses for the first six months of the year and said it was drawing a line under the liabilities for the Deepwater Horizon oil disaster at $61.6bn. An underlying replacement cost profit of $720m in the three moths to the end of June was down 45% from the same period last year, while at the reported level the loss before tax of $3.38bn for the second quarter was less than half its comparative from 2015 and the $4.24bn loss for the first half of the year was an improvement from $6.34bn last year.

BT Group's infrastructure arm Openreach should be forced to become a distinct company with its own board, own staff and separate branding to give it independence from the larger group, a report from regular Ofcom declared on Tuesday. As a legally separate company within BT Group, with its own ‘articles of association’ and a majority of independent directors who are not appointed by or connected to BT, the company would be obliged to consult formally with customers such as Sky and TalkTalk on large-scale investments.

Mondi Group updated the market on its earnings expectations for the six months ended 30 June on Tuesday morning, ahead of the release of its results for the half-year on 4 August. The FTSE 100 firm said it anticipates basic underlying earnings per share of 73 to 77 euro cents, up from 67.8 cents a year ago, and basic earnings per share of the same 73 to 77 cent range, well up from 60.3 cents last year. Mondi said basic headline earnings per share should also fall within the same range, compared with 60.1 cents in the comparative period.

Newspaper round-up

One of the UK’s top monetary policymakers has indicated he has changed his mind after a series of negative business surveys and now favours an immediate stimulus for the UK economy. The new stance of Martin Weale, an independent member of the Bank of England’s Monetary Policy Committee, all but guarantees that the central bank will announce a package of stimulus measures to fight a post-referendum downturn at its August 4 meeting. - Financial Times

Royal Bank of Scotland's Natwest has become the first bank to warn business customers it may charge them negative interest rates on money held in current accounts. In what is believed to be a UK first, the bank has signalled its intention to force account holders to either pay to hold money or move funds elsewhere. - Telegraph

The Financial Conduct Authority (FCA) should be stripped of its powers to fine and ban individuals for wrongdoing, according to a report by MPs that calls on new chancellor Philip Hammond to commission an independent review into whether an alternative investigatory body should be set up. The Treasury select committee said a new enforcement function should be set up outside the FCA and the Bank of England. Such a move would address the issues raised by the report into the collapse of HBOS, which was published in November 2015. - The Guardian

A tax break used by millions of homeowners provides “scope for widescale abuse to go undetected”, according to the government’s spending watchdog. The National Audit Office has called for more scrutiny of the capital gains tax exemption, which is used by people selling their main home and costs the exchequer £18bn a year. - Financial Times

Commerzbank warned on Monday night that its capital position had weakened in the second quarter as the result of a number of accounting adjustments. In an unscheduled announcement, Germany’s second-largest bank by assets said that its core tier one capital ratio — a key measure of financial strength — had fallen from 12 per cent at the end of March to 11.5 per cent at the end of June. - Financial Times

US close

US stocks closed a little lower on Monday as investors looked ahead to a busy week in terms of corporate releases and rate decisions by the Federal Reserve and the Bank of Japan.

The Dow Jones Industrial Average ended down 0.4%, the S&P 500 fell 0.3% and the Nasdaq was off 0.1%.

At the same time, oil prices were weaker, denting energy stocks such as Chevron and Exxon Mobil. West Texas Intermediate was down 2.6% at $43.05 a barrel while Brent crude was 2.3% lower at $44.65.

The main focus in the US this week will be the Fed’s rate announcement on Wednesday, with market participants expecting the bank to keep rates on hold.

Ranko Berich, head of market analysis at Monex Europe, said: “The latest US data contains plenty of evidence to help the hawks on the FOMC make their case. Price and labour market data indicate a tightening labour market and rising wages, and, after the dip seen in May, June’s jobs report showed job creation and wage growth once again beginning to pick up.