(Alliance News) - London's FTSE 100 ended Tuesday's session just about in the green, with BP's interim results offsetting a share price slide for Diageo and trepidation over US stimulus efforts.
The FTSE 100 index closed up 3.15 points, or 0.1%, at 6,036.00. The FTSE 250 ended up 149.58 points, or 0.9%, at 17,307.70, and the AIM All-Share closed up 1.74 points, or 0.2%, at 894.55.
The Cboe UK 100 ended down 0.2% at 600.63, the Cboe UK 250 closed up 0.8% at 14,643.77, and the Cboe Small Companies ended up 0.4% at 9122.43.
In European equities on Tuesday, the CAC 40 in Paris ended up 0.3%, while the DAX 30 in Frankfurt slipped 0.4%.
"Markets have struggled to muster much enthusiasm, although it looks like the buyers are back in control after big tech earnings last week. What investors are really looking for is progress on a fresh stimulus bill in Congress, but this looks to be a tall order given how little success lawmakers have had so far," said Chris Beauchamp, chief market analyst at IG.
Extra unemployment benefits expired last week after Congress failed to reach a deal on extending the payments.
The USD600 weekly payments to the tens of millions of people made jobless during the coronavirus pandemic have been credited with helping reduce poverty amid a downturn that caused a historic plunge in GDP. But the USD2.2 trillion Congressional measure did not anticipate the resurgence in Covid-19 infections seen in parts of the US in recent weeks
The US added 46,321 new coronavirus cases in 24 hours Monday, according to a tally by Johns Hopkins University. The world's largest economy also added 532 deaths, according to the Baltimore-based institution's tracker.
Monday was the second day to notch a slightly lower caseload, after a string of five days last week had all recorded more than 60,000 new daily infections.
President Donald Trump said during a coronavirus press briefing Monday that the virus was "receding" in parts of the southern and western US, deeming the situation "very encouraging." But the day before, White House coronavirus advisor Deborah Birx had warned that the country was entering a "new phase" of the pandemic, with rural areas just as threatened as major cities.
The dollar was lower against majors at the London equities close on Tuesday. The pound was quoted at USD1.3062, higher compared to USD1.3041 at the close on Monday.
The euro stood at USD1.1769 at the European equities close Tuesday, up against USD1.1737 at the same time on Monday. Against the yen, the dollar edged down to JPY105.87 compared to JPY106.19 late Monday.
Stocks in New York were mostly higher at the London equities close, with the DJIA up 0.5%, the S&P 500 index up 0.2%, and the Nasdaq Composite flat.
In London, the FTSE 100 managed to end the session with minor gains as a warm reaction to BP's interim results help to offset a slide in Diageo's share price.
Oil major BP ended up 6.5% despite swinging to an interim loss amid the challenging trading conditions created by the coronavirus pandemic.
For the half-year ended June 30, BP swung to a replacement cost loss of USD18.29 billion from a profit of USD3.78 billion a year before. Adjusted replacement cost loss for the interim period totalled USD5.89 billion versus a profit of USD5.17 billion.
First-half pretax loss amounted to USD26.13 billion versus USD7.93 billion profit. Revenue declined 36% to USD90.73 billion from USD141.15 billion. For the second-quarter to June-end, BP recorded a pretax loss of USD21.60 billion versus USD3.15 billion profit a year ago. Revenue fell 58% to USD31.19 billion.
BP declared a quarterly dividend of 5.25 US cents per share, down 50% from 10.50 cents per share for the previous quarter. It was the first time BP cut its dividend since the Deepwater Horizon disaster in 2010.
AJ Bell investment director Russ Mould commented: "The loss BP announced this morning, linked to the writedown of the valuation of its assets, was no worse than analysts had expected, likely prompting a measure of relief. And the benefit of being involved in almost every aspect of the oil market was revealed by a strong showing from its trading division as it benefited from all the volatility."
Brent oil was quoted at USD44.27 a barrel at the London equities close Tuesday from USD44.11 late Monday.
Gold was quoted at USD1,995.19 an ounce at the London equities close Tuesday against USD1,971.10 at the close on Monday - trading at record high levels as the precious metal closes in on USD2,000 an ounce.
"Gold is catching fire again on stimulus bets, some dollar weakness, and as risky assets get a boost on improving economic data and improving virus outlook," said Edward Moya, senior market analyst at Oanda.
Another blue-chip gainer on Tuesday was Melrose Industries, rising 9.4% after securing improved financial covenants with its lenders out to December 21, 2022.
The FTSE 100 turnaround specialist said the covenant amendments include a waiver of the test of net debt-to-earnings before interest, tax, depreciation and amortisation to the end of 2021.
The company said the amendments cover all its primary borrowing arrangements that contain financial covenants, which include a committed GBP3.2 billion revolving credit facility repayable in January 2023 and a committed term loan of around GBP900 million that has the option to be extended to April 2024.
BT shares gained 8.2% after Berenberg raised the telecommunications firm to Buy from Hold.
Slumped at the bottom of the FTSE 100 was Diageo, the Smirnoff vodka maker shedding 5.6% after revealing a hit from Covid-19 in the second half of its financial year.
Pretax profit fell 52% to GBP2.04 billion from GBP4.24 billion in the financial year that ended June 30, as sales slipped 8.3% to GBP17.70 billion from GBP19.29 billion.
Organic operating profit was down 14.4%, hurt by volume declines, cost inflation and unabsorbed fixed costs. Consensus had expected organic operating profit to fall 13.6%.
Diageo said it incurred one-off costs, including non-cash impairment charges of GBP1.3 billion. These were in India, Nigeria, Ethiopia and on the Windsor brand in Korea, reflecting the negative impact of Covid-19 and challenging trading conditions.
Elsewhere in London, AA shares ended up 17%. The roadside rescue firm confirmed that several parties have made takeover offers, and it is also is evaluating a range of refinancing options, including a share sale.
AA, which also provides motor insurance and driving lessons, said it currently in talks with several parties in relation to a wide range of potential refinancing options and, as part of discussions, three parties have made separate cash bids for the company.
The three parties are Centerbridge Partners Europe and TowerBrook Capital Partners UK , acting jointly, plus Platinum Equity Advisors and Warburg Pincus International individually.
The Times newspaper on Tuesday reported that one of the bidders had potentially made an offer of 40 pence a share, equating to a market value of about GBP250 million, or about GBP2.9 billion including GBP2.65 billion of debt.
AA shares closed at 29.20 pence on Tuesday.
The UK corporate calendar on Wednesday has half-year results from soft drinks bottler Coca-Cola HBC, financial services firm Legal & General, bookmaker William Hill and iron ore pellet producer Ferrexpo.
The economic calendar sees services PMIs from Japan, China, Germany, the eurozone and the UK at 0130 BST, 0245 BST, 0855 BST, 0900 BST and 0930 BST respectively. The same is due from the US at 1445 BST, and before this is ADP employment change at 1315 BST and the trade balance at 1330 BST.
By Lucy Heming; lucyheming@alliancenews.com
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