- FTSE 100 ends 4 points lower
- US stocks turn more mixed
- BP Q2 results impress
4.50pm: Modest fall for Footsie
The FTSE 100 index ended modestly lower on Tuesday as Wall Street put in a cautious morning showing amid geopolitical tensions around US House Speaker Nancy Pelosi’s trip to Taiwan albeit offset by some robust corporate earnings.
At the close, the UK blue-chip index was down 4.31 points, or 0.1% at 7,409.11, below the session peak of 7,433.34 but above the day’s low of 7,386.76.
In New York, around London’s close, the Dow Jones Industrial Average was 120 points, or 0.4% lower at 32,678, while the broader S&P 500 index was flat, but the tech-laden Nasdaq Composite edged up 0.2%.
Joshua Mahony, senior market analyst at online trading platform IG commented: “US markets are leading the losses today, as fears around a potential military escalation with China bring risk-off sentiment back into play. While we are still to hear from the remaining 36% of the S&P 500 that are yet to report, the reaction to a largely better-than-expected earnings season has mostly been priced in by this point.
“Thus, this week has seen markets shift their attention to the risk posed by Nancy Pelosi has just landed in Taipei despite Chinese government warnings. Sharp volatility for USDCNH highlight market uncertainty over how the trip will play out, but ultimately it is likely that this current posturing will soon blow over despite a short-term rise in tensions.”
3.50pm: Nowhere day
FTSE 100 headed to the close in London little changed, despite heavy falls on Wall Street, after a cautious day with the blue-chip index trading in a narrow range either side of its opening levels.
At 3.45pm the lead index was trading 3 points lower at 7,410.41 with the broader FTSE 250 177 points lower at 19,902.15.
In the US the DJIA tumbled 324.02 points to 32,474.38, the S&P 500 fell 24 points to 4,093.42 and the Nasdaq 71 points to 12,298.16.
Investors in London were cautious following losses overnight in Asia, rising tensions between the US and China, ongoing concerns about the state of the global economy and ahead of this week’s MPC decision.
Michael Hewson chief market analyst at CMC Markets UK commented: “European markets have slipped back as the rising uncertainty created by US House Speaker Nancy Pelosi’s trip to Taiwan, has served to keep markets on edge.”
“The increase in noise over this trip by China has upped the ante and raised the prospect of a serious miscalculation which neither side really wants. This appears to be a classic case of sabre rattling, with neither side wanting to be seen to back down.”
2.45pm FTSE 100 advances, shrugs off US falls
FTSE 100 pushed to session highs despite the expected weak restart on Wall Street.
At 2.45pm the blue chip index was trading up 16.01 points at 7,429.43 with the broader FTSE 250 index down 196.61 points at 19,882.62.
BP PLC (LSE:BP.) held its place near the top of the FTSE 100 risers (up 3.53%) after pleasing second quarter results today, while Pearson was still in demand (up 3.57%) following more posiitve comment after its results yesterday.
US stocks opened lower ahead of another slew of corporate earnings and amid growing geopolitical tensions around House Speaker Nancy Pelosi’s planned trip to Taiwan.
Just after the open, the Dow Jones Industrial Average had shed 179 points at 32,620 points.
The S&P 500 was down 13 points at 4,106 points, and the Nasdaq Composite had dipped 49 points at 12,320 points.
In terms of major movers, Uber shares had soared about 14% at the open after it reported its 2Q earnings.
The ride-share company beat analyst expectations on revenue and reported a 33% year-over-year increase in gross bookings, however, posted a $2.6 billion loss.
Caterpillar Inc shares, on the other hand, had plunged about 5% after its 2Q revenue fell short of expectations, with the company’s results highlighting ongoing challenges around supply chain issues, its exit from Russia, and weakness in China.
1.50pm FTSE 100 settles around opening levels awaiting US open
FTSE 100 was trading slightly higher in early afternoon trading fluctuating between narrow gains and narrow losses for much of the session.
At 1.50pm the lead index was trading up 1.59 points at 7,415.01 with the broader FTSE 250 index down 224.91 points at 19,854.32.
Investors in London were cautious following losses overnight in Asia, ongoing concerns about the state of the global economy and with US stocks expected to extend yesterday’s falls.
Wall Street is seen posting opening falls on Tuesday, having snapped the three-session winning streak that came at the end of the previous month as worries over a global recession revive and as geopolitical tensions increase after another warning from China about US House Speaker Nancy Pelosi's planned visit to Taiwan.
AIM listed Revolution Beauty Group Plc was a heavy loser today with shares collapsing 57.66% to 26p after it warned that it expected to report a small adjusted EBITDA loss for the six months to August 31st.
The group said revenue growth would be “low single digit” reflecting disappointing post Covid retailer updates (notably in the US), cost inflation, supply chain issues and the war in Ukraine.
11.45am: FTSE heads south, US seen opening lower
FTSE 100 headed back into negative territory in late morning trading following losses overnight in Asia, ongoing concerns about the state of the global economy and with US stocks expected to extend yesterday’s falls today.
By 11.45am the FTSE 100 was 16.95 points lower at 7,396.47 with the broader FTSE 250 down 225.59 points to 19,853.64.
Wall Street is seen posting opening falls on Tuesday, having snapped the three-session winning streak that came at the end of the previous month as worries over a global recession revive and as geopolitical tensions increase after another warning from China about US House Speaker Nancy Pelosi's planned visit to Taiwan.
Futures for the Dow Jones Industrial Average were trading 0.4% lower pre-market, while those for the broader S&P 500 index shed 0.5%, and contracts for the tech-laden Nasdaq-100 fell 0.7%.
Steve Clayton, fund manager at HL Select, Hargreaves Lansdown commented: "Wall Street struggled to make progress last night, after China informed the US that if House Speaker and senior Democrat, Nancy Pelosi, went ahead with a planned visit and set foot on Taiwanese soil, it would make a military response. Pelosi would be the most senior US politician to visit the disputed island in 25 years."
Corporate news could still provide a positive bulwark for the market, however. Shares of Pinterest soared more than 20% higher in extended trading on Monday despite reporting disappointing earnings after activist firm Elliott Management revealed it is the largest investor in the social media company.
And Cowen shares rose by nearly 5% after The Wall Street Journal reported that Toronto-Dominion Bank is close to buying the investment bank for more than $1 billion.
More earnings data is also due out on Tuesday, with DuPont (NYSE:DD), Caterpillar, KKR, Marriott International (NYSE:MAR), and Uber Technologies all set to report ahead of the opening bell, while Starbucks, Airbnb (NASDAQ:ABNB), Advanced Micro Devices and Prudential Financial (NYSE:PRU) will report after the market close.
Meanwhile, comments from Fed officials could offer clues on whether the central bank will temper the size of its rate rises at future meetings, with Federal Reserve Bank of Chicago president Charles Evans and St. Louis Fed president James Bullard set to speak at separate events later Tuesday.
On the data front, investors this week are mostly focused on the July US non-farm payrolls report due out on Friday.
10.30am: FTSE 100 recovers from early falls to push higher
FTSE 100 shrugged off early concerns about rising US-Chinese tensions to push higher in mid-morning trading supported by strong results from oil major, BP PLC (LSE:BP.).
By 10.30am the FTSE 100 was trading 9.34 points higher at 7,422.76 although the broader FTSE 250 remained in the doldrums, down 221.24 points at 19,857.99.
AJ Bell Investment Director, Russ Mould, said:
“The FTSE 100 was in consolidation mode on Tuesday morning, trading broadly flat but avoiding the falls seen in Asia overnight,”
“As if the market needed something new to worry about, there is now renewed concern about relations between the US and China as Nancy Pelosi is primed for a visit to Taiwan."
Elementis plc (LSE:ELM) enjoyed a strong start to trading after predicting that the group's financial performance is expected to be towards the top end of consensus expectations.
The news came as the specialty chemicals company reported 6% growth in half year revenue to US$478mln sending shares up 5.66% to 115.70p.
Biffa PLC (LSE:BIFF) was another stock in demand as the waste management company reported a sizeable fall in its provision for an HMRC landfill tax enquiry and the reinstatement of its final dividend.
Shares rose 8.32% to 390.80p following the news.
9.30am: Growth in house prices stalls - Nationwide
British house prices increased in July at the slowest monthly pace in a year, according to a report from mortgage lender Nationwide today.
It added the market is likely to slow further as the cost-of-living squeeze tightens and as the Bank of England keeps on raising interest rates.
House prices last month were 0.1% higher than in June when they rose by 0.2%.
Robert Gardner, Nationwide's chief economist, said the housing market had been surprisingly buoyant so far, given the strains on households' budgets and consumer confidence plunging to a record low.
"We continue to expect the market to slow as pressure on household budgets intensifies in the coming quarters, with inflation set to reach double digits towards the end of the year," Gardner said.
Martin Beck, chief economic advisor to the EY ITEM Club, cautioned that in the longer term “it’s hard to see how house price rises will avoid anything but a significant slowdown – but this would be a slowdown, not a contraction.”
“Previous significant corrections in values have tended to coincide with steep rises in unemployment, increasing the number of ‘forced’ sales.”
“But the backdrop this time looks far more benign.”
9.00am: FTSE 100 weakens on Asian tensions
FTSE 100 remained weaker as concerns about rising US-Chinese tensions weighed on Asian markets overnight.
At 9.00am the FTSE 100 was trading 12.14 points lower at 7,401.28 with the broader FTSE 250 down 175.99 points at 19,903.24.
BP PLC (LSE:BP.) led the FTSE 100 risers after announcing strong quarter two results, a further share buyback programme and plans to grow its dividend.
Michael Hewson Chief Market Analyst at CMC Markets UK said:
“Today’s quarter two numbers have seen BP build on the numbers in quarter one, with another set of record numbers, posting underlying replacement cost profits of $8.45bn, beating expectations of $6.73bn.”
Greggs PLC (LSE:GRG) served up strong first half results which pleased the market with shares rising 2.31% to 2,126p.
Total sales grew 27.1%, with 22.4% like for like sales growth in the first half of 2022.
Roisin Currie, Chief Executive said:
“These results demonstrate the continued strength of the Greggs brand and demand for our great tasting, quality and value for money offering.”
Man Group PLC (LSE:EMG) saw its shares fall 5.41% to 253.30p after warning it expects to see some volatility in flows in the near term, as clients access liquidity and rebalance their portfolios due to market movements.
Disappointing results from Travis Perkins (LSE:TPK) PLC weighed on the sector this morning with analysts at Peel Hunt expecting full year pre-tax profit forecasts to be reduced by around 3% as a result.
Shares in the building materials group slumped 7.81% to 949.60p dragging others in the sector lower such as Howden Joinery Group (LSE:HWDN) PLC (down 3.41%) and Kingfisher PLC (LSE:KGF) (down 2.6%).
8.30am: FTSE 100 opens lower, BP results impress
FTSE 100 made a weak start to trading on Tuesday following sharp falls in Asia overnight as concerns over US-Chinese tensions increased ahead of Nancy Pelosi's planned visit to Taiwan.
At 8.30am the blue-chip index was down 25.29 points to 7,388.66 and the broader FTSE 250 was also down 141.55 points to 19,937.68.
ING Economics said Pelosi’s planned trip could translate into a re-strengthening of the safe haven dollar and prompt weakness in China-sensitive currencies like the Australian and New Zealand dollar.
BP PLC (LSE:BP.) led the FTSE 100 risers after announcing strong quarter two results, a further share buy back programme and outlined plans to grow its dividend.
Joshua Warner, Market Analyst at City Index commented:
“BP investors have plenty to cheer about today as the company reaped the rewards from significantly higher oil and gas prices, a spike in refining margins and an ‘exceptional’ performance from its trading division. “
“The company said it plans to grow its dividend by around 4% and return around $4bln through share buybacks each year through to 2025, although this is based on an oil price of just $60.”
“That suggests returns could grow at a faster rate considering Brent is just shy of the $100 mark this morning. “
Building materials group Travis Perkins (LSE:TPK) PLC was a weak feature in the FTSE 250 after reporting first half numbers today.
Despite announcing that full year performance would be broadly in line with market expectations, shares fell back 7.42% to 953.60p.
Analysts at Peel Hunt expect the market consensus for pre-tax profit to move down by around 3% to £300mln.
The broker noted “continued good demand in the Merchanting business was offset by a softening DIY backdrop in Toolstation.”
Sage Group PLC shares advanced 1.75% to 719.20p as it predicted full year revenue growth at the top end of forecasts.
Reporting nine month results the accounting software provider reported recurring revenue up by 9% to £1,330mln, driven by a 20% rise in Sage Business Cloud revenue to £886mln.
Jonathan Howell, Chief Financial Officer, commented:
"Sage has performed strongly in the first nine months of the year, with momentum continuing to build, as more businesses choose Sage Business Cloud solutions to support their digital transformation.”
“ As a result, we now expect organic recurring revenue growth for FY22 to be towards the top end of our guidance range of 8% to 9%.”
7.35am: FTSE expected to open lower after falls in Asia
FTSE 100 is expected to make a weak start to trading on Tuesday reflecting a weak performance in Asia overnight and with ongoing concerns about the strength of the global economy.
Spread betting companies are calling the lead index down by around 35 points.
Asian markets were knocked by nervousness about an escalation in Sino-US tension, with US House of Representatives Speaker Nancy Pelosi expected to visit Taiwan during the day.
The Hang Seng and Nikkei both suffered sharp falls.
US markets also failed to hold in positive territory breaking their three-day winning streak.
The Dow closed Monday down 47 points, 0.1%, at 32,798, the Nasdaq Composite dropped 22 points, 0.2%, to 12,369 and the S&P 500 slid 12 points, 0.3%, to 4,119.
In London oil major BP PLC (LSE:BP.) reported second quarter results with underlying replacement cost profit of $8.5bln compared to US$6.2bln in the previous quarter.
This was driven by strong realized refining margins, continuing exceptional oil trading performance and higher liquids realizations.
Reported profit for the quarter was $9.3bln, compared with a loss of $20.4bln for the first quarter 2022.
Looking ahead, BP said it expects to have capacity for an annual increase in the dividend per ordinary share of around 4% through 2025.
Sage Group PLC said it expects full year revenue growth at the top end of forecasts as it provided investors with a trading update today.
The accounting software provider reported recurring revenue for the first nine months of the year up by 9% to £1,330mln, driven by a 20% rise in Sage Business Cloud revenue to £886mln.
Software subscription revenue grew by 14% to £1,051mln resulting in subscription penetration of 75%.
Jonathan Howell, Chief Financial Officer, commented:
"Sage has performed strongly in the first nine months of the year, with momentum continuing to build, as more businesses choose Sage Business Cloud solutions to support their digital transformation.”
“ As a result, we now expect organic recurring revenue growth for FY22 to be towards the top end of our guidance range of 8% to 9%.”
Travis Perkins (LSE:TPK) told investors it expects to deliver a full year performance broadly in line with market expectations.
The news came with first half year results and follows a recent profits warning by industry rival Wickes.
The building materials group reported a 10.3% increase in revenue to £2,535mln and an 11.7% rise in EPS to 51.6p.
Nick Roberts, Chief Executive Officer, commented:
“The strong performance of our Merchant businesses is set to continue into the second half, driven by our agility in managing inflation and by our leading service propositions.”
“This will be offset by a combination of the normalisation of Toolstation’s customer base and the increased investment in the Toolstation growth opportunity in the UK and Europe.”
7.00am: FTSE 100 expected to open lower after Asian falls
FTSE 100 is expected to open lower on Tuesday following falls in Asia overnight with spread betting companies are calling the lead index down by around 44 points to 7,386.
Asian markets were knocked by nervousness about an escalation in Sino-US tension, with US House of Representatives Speaker Nancy Pelosi expected to visit Taiwan during the day.
In the US the Dow closed Monday down 47 points, 0.1%, at 32,798, the Nasdaq Composite dropped 22 points, 0.2%, to 12,369 and the S&P 500 slid 12 points, 0.3%, to 4,119.
The benchmarks enjoyed time above water but couldn't salvage a winning day to begin August after a strong final week of July.
“Markets may test the substantial rally that occurred last week as they consider the progress the Federal Reserve has made thus far to stem the course of inflation,” John Stoltzfus, Oppenheimer’s chief investment strategist, wrote in a note, according to CNBC.