- FTSE 100 up 7 points at 8,775
- BP reports solid Q4 results, says buyback policy to be reviewed
- Entain shares tumble as CEO departs after just over five months
3.49pm: Expect big changes for BP
Some other responses to the BP earnings earlier.
The results, says market analyst Neil Wilson at TipRanks, show that activist investors Elliott, which was revealed to have recently built a stake, "has a point".
BP said it would "fundamentally reset" its strategy as profits slid to a four-year low and the timing of the revelation about Elliott's stake and today's results "is no coincidence", says Wilson. "This is being scripted so we can expect big changes.
"The process of shifting from the Looney-era green bets had already begun but Elliott has kicked up a notch or seven.
"Weaker average oil prices are a problem, so are new refining plants in Asia and Africa which are pushing down on margins. These are industry-wide pressures, though, and the decline in BP is more about the strategy and where the capex should go. All eyes on the delayed investor day on Feb 26th now."
Derren Nathan, head of equity research at Hargreaves Lansdown, says BP profits were dragged down by "a perfect storm of bad news".
He says an expected $3 billion of divestments from non-core operations in 2025 will be welcome, but the "burning question" is one of capital allocation and strategy that Auchincloss promises to unveil two weeks from tomorrow.
3.32pm: BP and co should be 'made to pay' for climate change
Earlier BP boss Murray Auchincloss said after around a year in charge he and the board "now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns", with "a new direction for BP" that be shared with investors and analysts at the capital markets update on 26 February.
Most investors know that this means focusing on short-term cashflow rather than long term projects (and the good of the planet), ie less renewables and more oil & gas.
Responsing to reports that BP intends to move away from renewables and increase oil and gas production, Elena Polisano, head of Greenpeace’s climate justice campaign, said: “It’s so jarring for BP to double down on fossil fuels while the world is still reeling from the latest gut-punches of extreme weather - from Storm Éowyn, to the ferocious LA wildfires, and floods in Queensland, Australia.
“Pressure is growing for governments to see these fossil fuel billions as fair game to be directed towards extreme weather recovery funds, as is already happening in Vermont and New York.
“The climate crisis is fuelled by BP, so it’s only fair to make polluters pay."
2.26pm: BoE's Bailey warns against loosening regulations
Bank of England governor Andrew Bailey has warned against loosening regulation too much, in a speech that comes as the UK and US governments both look to take a hatchet to tight rules governing various sectors and encourage watchdogs to lean back a bit more.
Late last year, Chancellor Rachel Reeves said red tape brought in following the 2008 financial crisis had gone "too far" and was stifling growth.
"There is a reaction taking place against regulation, and the responses to the global financial crisis,” Bailey said in a speech in London.
Bailey, former boss of the City watchdog, the Financial Conduct Authority, said current dangers include "a tendency towards increased concentration and interconnectedness" while "opacity and limited visibility in certain markets tends to lead to crowded trades, impairs risk management, and is more likely to prompt a rush to the exit in times of stress".
1.23pm: Banks in focus this week
Ahead of the start of the UK bank reporting season, there's been a few notes from analysts around the City in recent days.
Today Citi said their top pick in the sector is NatWest Group PLC (LSE:NWG), which reports results this Friday, and their least preferred is Lloyds Banking Group PLC (LSE:LLOY), which reports next week.
The analysts said the UK economic outlook "looks far from rosy, with fears of stagflation growing", but British domestic banks are likely to be the only banks that will be able to grow their key net interest margins (NIM) in 2025, they added, which should drive "superior" growth in earnings per share compared to overseas rivals.
Lloyds is the exception, Citi reckons.
However, analyst Gary Greenwood at Shore Capital wonders if there could be some respite for Lloyds, Close Brothers and the other smaller players saddled with a potential £30 billion bill for alleged motor finance mis-selling.
Next month will see the start of a Supreme Court appeal hearing hoping to overturn the costly earlier ruling.
Greenwood, picking through the entrails of a comprehensive update by S&U, one of the smaller players, finds some crumbs of comfort, even if the appeal fails.
The analyst lasered in on a statement from S&U chairman Anthony Coombs, where he states: "My view is that even should the Supreme Court uphold the lower court's decision in principle, any 'harm' found to have been suffered by consumers will be so marginal as to make demands for redress minimal".
12.46pm: OpenAI not for sale
After Elon Musk launched a bid for OpenAI overnight, CEO Sam Altman has shot down the unsolicited $97.4 billion offer.
A tweet from Altman said: "no thank you, but we will buy Twitter for $9.74 billion if you want."
Musk was not impressed.
Swindler
— Harry Bōlz (@elonmusk) February 10, 2025
12.22pm: In the red
As we begin the afternoon, the FTSE 100 is slipping back into negative territory.
Entain is still the big faller, down 10.3%, as it begins a search for its sixth CEO is less than a decade.
Other fallers include easyJet, down 4.2%, and BA owner IAG, down 2%, as oil prices rise again.
Miners are also weighing on the index, with Anglo American down 3.2%, Glencore falling 2.7%, Antofagasta 2.1% and Rio Tinto 1.6%.
Among the index heavyweights, AstraZeneca, BP and Diageo are all down more than 1%.
BP published results this morning showing quarterly profits at a four-year low, but flagged that it would "fundamentally reset" its strategy at a capital markets day in two weeks.
US futures are also in the red, with the Nasdaq 100 currently predicted to fall 0.5%, the S&P 500 down 0.3% and Dow Jones futures falling 0.2%.
11.51am: Ashtead updates on US listing plans
Ashtead Group PLC (LSE:AHT) said it plans to list in the US as Sunbelt Rentals in early next year, with a secondary listing in London, if investors vote for it at a meeting in June.
This follows the decision of the equipment rental group's board that a US primary listing would be in the best interests of the company and investors, with a secondary listing retained in London.
"Since December, the chair and the executive team have met with a wide variety of shareholders who have understood the rationale and been supportive of the proposed move," the FTSE 100 company said in a mid-morning statement.
11.30am: Small cap spotlight
Looking at the smaller end of the London market, there are some interesting stories today.
Kodal Minerals PLC (AIM:KOD) flagged the successful first spodumene concentrate produced at the Bougouni Lithium Project in southern Mali, with the milestone achieved during the commissioning of the dense media separation processing plant.
The first batch of spodumene concentrate was recorded at 5.53% lithium oxide (Li₂O), in line with the planned production profile, and chief executive Bernard Aylward said the AIM-listed company is "confident that this progress will continue into the commercial production phase and our project team will continue to work towards our 10,000 tonnes per month target".
Kodal shares climbed 8% on the news.
Elsewhere, Strip Tinning Holdings PLC revved up 20% after the British car parts group confirmed an order from a German 'tier 1' automotive supplier for components for a US vehicle manufacturer that it notes is "wholly owned by one of the world's largest corporations and is currently running trials on public roads in three US cities".
That description could fit Cruise, an autonomous vehicle manufacturer wholly owned by General Motors (NYSE:GM), or maybe Waymo, which is owned by Alphabet Inc.
Another AIM company, Hercules Site Services PLC (AIM:HERC), has offloaded its suction excavator business for £2.4 million in cash.
The deal immediately gets rid of most of Hercules’ debt and lease liabilities and allows it to focus on its labour supply business, which supports major UK construction and infrastructure projects in sectors like nuclear, energy, aviation, water, and rail.
11.07am: Indecisive markets with tariffs in backdrop
The FTSE 100 is the only one of the major European indices in the red, but is only down a handful of points.
Across the Channel, the France 's CAC and Germany's DAX are both up marginally, less than 0.1%, with the Italian and Spanish benchmarks in a similar mode.
The pan-continental Euro Stoxx 600 is down 0.06%.
Earlier, European Commission president Ursula von der Leyen said: "I deeply regret the US decision to impose tariffs on European steel and aluminum exports,” said in a Tuesday statement. “Unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures."
This morning, European stocks have been "relatively indecisive", is the summing up from market analyst Josh Mahony at Scope Markets, who says "tariff fears [are] casting a shadow over the bulls for the time being".
US President Donald Trump’s promise that he will apply reciprocal tariffs today "brings a high degree of uncertainty that has sparked sharp declines", says Mahony, with stocks in Hong Kong, India and Australia in the red.
"India is a particularly interesting case, with the country’s relatively high import tariffs (14%) put them in the firing line when Trump imposes new action around midday Eastern time," he says.
"The dominant areas that will be in focus are South America (Argentina, Brazil, and Mexico) and Asia (India, Korea, China, and Indonesia), with tariffs rates relatively elevated in those particular nations."
For the UK, the imposition of tariffs on steel imports poses a problem for the government, with the Kier Starmer thus far indicating that talks are preferable to a trade war with this key trade partner.
"It is early doors, but the relatively balanced trade relationship and friendly approach to negotiations has helped position the FTSE 100 as a relatively safe bet for traders and investors."
Crude oil is on the rise once again today, with Brent up to $76.75 a barrel, with energy markets rebounding following a period of weakness since Trump took office.
"Coming ahead of tomorrow’s US CPI report, there is a hope that we will see those recent oil & gas declines drive monthly inflation lower after a concerning 0.4% figure last month," says Mahony.
"However, the faltering Gaza peace process, coupled with falling Russian output and fresh sanctions on Iranian crude provide renewed tightness in the face of demand concerns. On the flip-side, the prospect of a tariff-led slowdown in global growth rates does provide the basis for a weaker demand outlook for crude, highlighting the potential volatility once Trump announces his latest measures today."
10.40am: Rennaissance Mann
Catherine Mann has given a much more detailed explanation in her speech, which the BoE has published on its website and is more for those who are trained in economics.
"In the end, it is firms’ pricing decisions that determine aggregate inflation outcomes," she says.
"What evidence is there on firms’ pricing power? In the data, I have focused on the most income and price elastic categories of products as the leading indicators of how consumer behavior can discipline firms’ pricing strategies.
"In the latest disaggregated data, the decelerations in these categories such as catering, culture, and hospitality have become more systematic. Even more granularly (some 1.25 million observations per year), the balance of price increases and decreases in the CPI microdata for non-energy goods and for services has nearly returned to their pre-Covid levels, indicating to me that the risk of embedded inflationary behaviors has diminished sufficiently to warrant a reduction in monetary policy restrictiveness."
9.59am: TRIG under a cloud
A fourth-quarter update from FTSE 250-listed Renewables Infrastructure Group (LSE:TRIG) was "pretty grim", says Stifel analyst Iain Scouller, downgrading his rating to 'negative' from 'neutral'.
Net asset value in the fourth quarter was down 4.7%, resulting in 9.2% decline over the whole of 2024 and the second-half dividend was "uncovered" with only 0.9 times cash cover.
Normally immaterial, the results saw a "previously unheard of" annual reassessment of transmission losses in the grid, which reduced NAV by 0.9p.
"While 2024 has been a poor year for the renewables sector, we think 2025 could see more stable NAVs, assuming power prices hold-up at their recently more elevated levels of £80-£100/MWh.
"However, we think this 2024 outturn for TRIG will put a cloud over its shares, and whilst the circa 30% discount they are trading on appears to offer value, we can't really see any immediate catalyst (barring sector M&A) to re-rate the shares."
Scouller has also put out a separate note on expected M&A activity in the infrastructure and renewables sector, following the offer for BBGI last week.
"We believe this highlights the 'value' sitting in many of these portfolios which typically languish on 20% to 30% discounts," he says.
Key issues for bidders assessing whether to bid include shareholder bases, portfolio mix, debt structures and management termination terms.
Whilst most Infra funds have simple debt structures at the listed company level, some have long management contracts, and while most Renewables have short management contracts, they have complex debt structures.
9.29am: BoE's Mann sees limited inflation this year
The Footsie has dropped into the red in recent minutes, not long after comments emerged from Bank of England rate-setter Catherine Mann.
The Monetary Policy Committee member has given an interview to the Financial Times and is making a speech in Leeds after last week saw her vote for a half-a-percent interest rate cut - a major U-turn from being an outspoken hawk for most of her time on the committee.
Mann said that she changed her mind about the policy because “demand conditions are quite a bit weaker than has been the case”.
She said companies will struggle to raise prices this year in the face of consumers that are going to be hit by "non-linear" job losses, putting pressure on spending.
As a result, price increases in 2025 will be consistent with the bank's 2% inflation target, Mann argued.
Her call for a larger rate cut than the 25 basis points favoured by the rest of the MPC was a way to communicate with traders about "what we think are the appropriate financial conditions for the United Kingdom economy".
8.49am: Dunelm down and Cussons climbs
Among the other trading updates today, retailer Dunelm Group PLC (LSE:DNLM) has seen its shares drop 1.4% as it announced the impending retirement of chief executive Nick Wilkinson, as well as a small improvement in half-year profits and a repeat of its special dividend.
Analyst Ben Hunt at Panmure Liberum called the update "a curate's egg" (dictionary definition here).
"PBT is a touch soft and there is evidence of slowing underlying top line momentum - sales per customer fell in the period and market share gains have moderated," says Hunt.
"Still, management has done well to control opex and current trading has been ‘encouraging’. We continue to worry that Dunelm will struggle to hurdle inflationary cost headwinds (and grow profits - as expected by consensus) which look set to remain elevated for the next 18 months, in the face of anaemic top line growth".
Elsewhere, PZ Cussons (LSE:PZC) is up 8% to 86p on the back of its interim results (up from recent 20-year lows), which were in line with expectations and showed some encouraging elements.
CEO Jonathan Myers says "three of our priority markets - the UK, Indonesia and ANZ - have delivered solid overall like for like revenue growth of 2%", with the strongest performance in the UK business for three years, thanks in part to particularly successful Christmas sales for Sanctuary Spa gifting.
Revenues were down 10% to £249.3 million but at statutory level the group broke back into profit, while underlying pre-tax profits fell 24% to £19.8 million.
Revenue and adjusted operating profit have continued to be impacted by the depreciation of Nigeria's naira.
"The more recent stabilisation of the exchange rate and our operational interventions on the ground have, however, enabled us to sustain our trading momentum in the Nigerian market whilst reducing our exposure to further currency depreciation," Myers said.
8.29am: Musk and co bid for OpenAI
Elon Musk is leading a consortium that has launched a $97.4 billion offer to take control of OpenAI, just months after he sued the artificial intelligence company that he co-founded OpenAI in 2015.
Musk, who left OpenAI in 2018, has been critical of its move toward a for-profit model, arguing that the company has strayed from its original mission of open-source AI development.
In a statement, he said: “It’s time for OpenAI to return to the open-source, safety-focused force for good it once was.”
What will Microsoft, a major investor in OpenAI, say later?
8.15am: FTSE 100 charges to new peaks
Defying futures market predictions, the FTSE 100 has charged ever higher to new record peaks, up 20 points to 8,788.2 so far.
Engineer Intertek, credit checker Experian and defence group BAE Systems are the leading early risers.
BP started slightly higher but is now slightly in the red, down 0.2%.
Ladbrokes owner Entain PLC (LSE:ENT) is down 10% as its CEO steps down only five months after starting.
Housebuilders Persimmon, Barratt Redrow, Taylor Wimpey and Berkeley are all down as mid-cap rival Bellway's half-year update failed to impress.
7.57am: Bellway on track
FTSE 250-listed housebuilder Bellway PLC (LSE:BWY) has delivered a half-year update where confidence about its performance is mixed with an acknowledgement that wider economics conditions, including mortgage rates and consumer confidence are likely to determine its full-year results,
For now, it still expects to complete more home sales and expand profit margins this year.
The builder said it is "on track" to deliver at least 8,500 homes for its financial year to 31 July, up 7,654 a year earlier, with a lower output in the second half.
“While mortgage interest rates have increased modestly since the autumn, customer demand has remained robust, and the group has a healthy order book to support our targeted growth in volume output for the full year,” said chief executive Jason Honeyman, who also welcomed the government's reforms to the planning system.
7.25am: BP to review buybacks and capex
BP PLC (LSE:BP.) has released results that look mostly better than expected, with its remaining $1.75 billion quarterly buyback still in place, but the oil giant said it intends to review buybacks and capex as part of its strategy update later this month.
An underlying replacement cost (RC) profit for the quarter fell to $1.2 billion for the final quarter of 2024, from $2.3 billion for the previous quarter, reflecting weaker refining margins, higher impact from turnaround activity, seasonally lower customer volumes and fuels margins and higher other businesses & corporate underlying charge.
A £2 billion reported loss was made, compared with a $0.2 billion profit for the third quarter, mainly due to "adjusting items" of $3.4 billion.
Adjusted earnings per share of 7.36 cents were below the consensus estimate of 8.43 cents.
But operating cash flow of $7.43 billion was better than the expected $6.13 billion and adjusted net debt was slightly lower than predicted.
7.13am: FTSE to retreat from high
The FTSE 100 has been tipped to retreat slightly on Tuesday from its record closing high at the start of the week, despite a positive session overnight on Wall Street.
Futures markets have the London benchmark slipping around seven points, having added just over 67 points to reach 8,767.8 on Monday, with an intraday record also set of 8,785.85.
Overnight, the tech powered Nasdaq led the way, rising 1% led by the likes of Super Micro Computer and Boradcom.
The S&P 500 rose 0.7%, the Dow Jones and the Russell 2000 by 0.4%.
Asian markets are the likely source of futures angst for the Footsie, with most indices in red, led by the Hang Seng and Sensex, down 0.7% and 0.5%.
5am: UK retail sales rebound, but golden quarter still disappoints
UK retailers enjoyed a solid rebound last month, boosted by January sales after a disappointing few months to finish last year, according to data from the British Retail Consortium and KPMG out this morning.
Total retail sales in January 2025 grew 2.6% compared to a year earlier, which was stronger than the average growth of 0.4% over the last three months of last year, and above the 12-month average growth of 0.8%.
Non-food sales increased 2.5% in January, having been in decline over much of last year, with a 1.1% average decline in the last quarter of 2024 and a total decline in non-food of 1.5% over the whole year.
Discounts on furniture, bedding and other home accessories were most popular, the survey found, but with growth across nearly all non-food categories
Food sales swelled 2.8% in January, slower than the growth of 6.1% seen in January 2024 but close to the 12-month average growth of 3%.
What else to watch out for on Tuesday
Even before the activist investor news that sparked extra interest this week, BP has some big strategic questions to answer, according to analysts... Read more
Elsewhere, there are speeches to watch out for from central bankers on both sides of the Atlantic, with Bank of England governor Andrew Bailey and known hawk Catherine Mann, fresh from voting for a rate cut at last week's meeting.
Announcements due on Tuesday:
Trading updates: Bellway PLC
Interims: Dunelm Group PLC, MJ Gleeson PLC, PZ Cussons PLC
Finals: BP PLC, Wynnstay Group PLC
US earnings: Coca-Cola, Shopify, Gilead Sciences, Super Micro Computer, Upstart Holdings
AGMs: National World PLC, Rws Holdings PLC, Windward Ltd
Economic announcements: BRC Retail Sales (UK)