FTSE 100 Live Feb 08: BP pledges UK investment as profits hit $12.8bn, Ocado releases results
The FTSE 100 index continues to rise
Resurgent mining stocks have taken the FTSE 100 index to a new two-year high as London’s outperformance against volatile US markets continues.
With growth stocks under pressure from higher interest rates, investors have taken refuge in the London strip of energy, resource and financial stocks, as their pricing power offers better protection against inflation.
That rotation accelerated today as firming commodity prices and better than expected results from BP helped the FTSE 100 index rise to 7,631.31 for its highest level since January 2020.
From one of the laggards of the post-pandemic recovery, London’s elite is now among the best performing indices after rising 3% in 2022. The S&P 500 is down 6%.
A surge in iron ore prices helped the mining sector dominate today’s riser chart, with heavyweights Rio Tinto, Anglo American and Glencore all up 3%.
There was also momentum for travel and leisure stocks after British Airways owner IAG rose 2% or 3.4p to 164.5p and hotel groups Whitbread and InterContinental added 47p respectively. at 3063p and 107p at 4972p.
The FTSE 100 index then stood 35.42 points higher at 7608.89, with energy company SSE up 1% after raising its full-year profit forecast to at least 90p per share per share. compared to 83p in November.
SSE’s gas-fired power plants performed better than expected, compensating for a summer of low production for its wind farms. Shares rose 20.5p to 1,572p but are down so far this year as SSE continues to reject calls from activist investor Elliott to unlock £5bn of value through a separate listing from its renewable energy business.
Alongside a 12% drop in Ocado shares, FTSE 100 newcomer Airtel Africa plunged 9% after a cut-price equity placement raised £81.2m for the selling shareholders. Mobile services activity fell 14.1p to 1p above the 140p sale price.
The FTSE 250 index rose 15.10 points to 21,812.39, with Micro Focus International’s enterprise software business down 11% despite meeting 2023 targets in its annual results.
Comment: Our pension funds should buy more BP
One of the arguments against a windfall tax on BP is that we would only take it on ourselves.
Those billions he distributes in dividends and stock buybacks go to our ISAs and pension funds, they say, a line of thinking that assumes everyone has an ISA and a pension fund.
In any case, how much of BP do we small investors own? It’s hard to be exact, but the short answer is: not much.
AJ Bell says investors with 10,000 or fewer BP shares own about 1.6% of the company.
find out more here
Mining stocks lead FTSE 100 to 2-year high
Mining shares and a 7.2p earnings improvement to 415.85p for BP helped the FTSE 100 index climb 48.81 points to 7622.28.
The elite’s continued outperformance against volatile US markets means the FTSE 100 is back at a two-year high. Shares of Glencore and Anglo American both rose more than 2%.
SSE rose 1% after the power producer raised its expectation for adjusted earnings per share for the full year 2021/22 to at least 90p from 83p previously. It benefited from the good performance of its thermal and hydropower plants, compensating for lower than expected production from its renewable assets.
Ocado shares fell 9% or 131.5p to 1,275.5p after reporting a bigger loss for 2021.
Mobile services business Airtel Africa, which joined the FTSE 100 earlier this month, fell 10% or 15.3p to 139.7p after a 140p equity placement raised 81.2 million pounds sterling for the selling shareholders.
The FTSE 250 index rose 80.98 points to 21,878.27, with Bellway up 85p to 2923p after its latest trade update.
BP shares rise after earnings rise
Shares of BP rose 1.5% after today’s results beat expectations and the company announced an increased share buyback program of $4.2 billion ($3.1 billion). pounds sterling). Net debt also fell for the seventh consecutive quarter to $30.6bn (£22.6bn) at the end of 2021.
Richard Hunter, head of markets at Interactive Investor, said the tailwind from strong oil prices meant stocks were up 62% over the past year, compared with 16% for the broader FTSE 100.
He said: “Over the past two years, however, the price remains down 14%, implying a broad appreciation of the challenges ahead.
“BP nevertheless remains well regarded even in the face of the maelstrom of transformation, and the market consensus on the stock as a buy reflects optimism for its outlook.”
Ocado’s loss widens on increased investment
Grocery tech firm Ocado today blamed the investment boost for a bigger full-year loss of £176.9million.
Five new customer fulfillment centers opened globally, including the first two in the United States, while the company also rolled out its new Ocado smart platform to ten grocery customers. Revenue rose 7.2% to £2.5bn as UK retail rose 4.6%.
Ocado’s online grocery business in the UK is now a 50/50 joint venture with Marks & Spencer, while its robotics, artificial intelligence and simulation technologies serve some of the world’s biggest grocers .
Chief executive Tim Steiner said the past year has further reinforced that demand for online groceries is here to stay.
He added: “The next generation of Ocado technology, which we have called Ocado Re:Imagined, represents a transformational leap forward enabling our partners to vastly outperform their peers online.
Tech stocks hit by US volatility
The continued outperformance of stocks in the energy, materials and financials sectors helped the FTSE 100 index rise 0.8% and the FTSE 250 0.4% on Monday.
The biggest risers were iron ore pellet producer Ferrexpo, which jumped 5% amid rising commodity prices and the prospect of a recovery in construction in China.
Today’s session is expected to see the FTSE 100 open flat at 7573 after a volatile day for investors in the US.
Technology-focused companies endured another tough session, with Google owner Alphabet and PayPal among stocks down 3% or more.
Fitness company Peloton proved to be the exception after shares jumped 21% on the back of speculation linking it to potential takeover interest from Amazon, Nike or Apple.
The shares are back above their listing price in the 2019 IPO, but still far from the pandemic-induced highs seen last year.
US futures point to a flat start to the session as attention turns to Thursday’s inflation data, which could show a 7.3% annual rate for January and increase jitters over the prospect that the Federal Reserve is accelerating the pace of interest rate hikes.