BP Share News (BP.)

(Alliance News) - The FTSE 100 retained Tuesday morning's gains following a rebound in Asia overnight, with BP and Ferguson helping to boost London's blue-chip index.

The FTSE 100 index was up 99.66 points, or 1.4%, at 7,425.97 on Tuesday. The mid-cap FTSE 250 index was up 258.19 points, or 1.2%, at 21,418.63. The AIM All-Share index was up 0.9% at 960.23.

The Cboe UK 100 index was up 1.3% at 12,583.29. The Cboe 250 was up 0.9% at 19,333.12, and the Cboe Small Companies up 0.3% at 12,465.28.

In mainland Europe, the CAC 40 in Paris was up 1.3% while the DAX 30 in Frankfurt was 1.2% higher Tuesday afternoon.

"European shares edged higher alongside US futures on Tuesday following a solid recovery overnight by Asian markets," said Pierre Veyret, technical analyst at ActivTrades.

"Today's market sentiment is being boosted as investors seem to welcome the set of measures by the Chinese government to sustain economic growth, as the negative impact of the coronavirus remains hard to gauge," said Veyret. "Investors' risk-on trading mood has also been triggered by the last words from the Office of the US Trade Representative who said President Trump could provide China with some flexibility regarding the Phase One trade deal if the numbers are going in the right direction, which would reduce the virus' impact on the relationship between the world's two largest economies."

More Chinese cities, including one just 175 kilometres from Shanghai, were put under lockdown on Tuesday, as the impact of a deadly new virus spread further from its epicentre.

Around 12 million people are affected by the new restrictions, adding to the tens of millions of people already quarantined in and around Wuhan, ground zero for 2019-nCoV.

Nationwide, more than 20,000 people have been infected by the new virus, with 425 now known to have died.

After sinking 7.7% on its post-Lunar New Year holiday debut, the Shanghai Composite rose 1.3% on Tuesday.

Ahead of the US open on Tuesday, futures point to an upbeat start for Wall Street. The Dow Jones and S&P 500 are both called up 1.0%, while the Nasdaq is seen 1.2% higher.

To come in Tuesday's economic calendar are US factory orders at 1500 GMT. In addition, US President Donald Trump's state of the union address is due at 2100 EST.

Already released in UK data, the decline UK construction activity slowed substantially in January.

The IHS Markit/CIPS PMI rose to 48.4 in January from 44.4 in December. The latest reading remained below the neutral mark of 50.0, indicating contraction in the sector, but signalled the slowest fall in output for eight months.

FXStreet consensus had seen a reading of 46.6 for January.

House building was the best performing area of construction activity, with output falling only slightly in January. Civil engineering was the worst performing category.

"The increase in the new orders balance to 49.5, from 44.5, and the highest levels of optimism about the 12-month outlook for demand since April 2018, suggest that the PMI will rise further over the coming months," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

The pound was quoted at USD1.3007 at midday Tuesday, flat compared to USD1.3008 at the close on Monday.

Elsewhere in forex, the euro stood at USD1.1053 at midday Tuesday, against USD1.1059 late Monday. Against the yen, the dollar was trading at JPY109.03 compared to JPY108.63 late Monday.

In commodities, Brent oil was quoted at USD54.85 a barrel midday Tuesday from USD54.90 late Monday. Gold was quoted at USD1,569.70 an ounce against USD1,576.67 at the close on Monday.

In London, BP and Ferguson were helping to boost the FTSE 100 at midday.

BP was up 4.4% after full-year profit beat analyst expectations, despite declining on a year ago.

In the three months to December 31, underlying replacement cost profit was down 26% year-on-year to USD2.57 billion from USD3.48 billion. For the full-year, it declined 21% to USD9.99 billion from USD12.72 billion.

According to company compiled consensus from 20 analysts, 2019 RC profit was predicted to come in at USD9.50 billion and for the fourth quarter alone at USD2.10 billion.

Ferguson shares gained 6.4% after the company said it is mulling two options for listing in the US following the planned demerger of its US and UK businesses, and announced it has started a new USD500 million share buyback.

Ferguson said that its strong cash generation, as well as giving opportunities to invest in organic growth and acquisitions, means the group has surplus cash resources available.

In addition, the plumbing and heating company said it is considering two options for its listing structure going forward.

The first option is to seek shareholder approval for an additional listing of ordinary shares in the US. Ferguson would seek an additional listing of its shares on a major US stock exchange whilst maintaining its existing premium listing on the London Stock Exchange.

An additional listing would require shareholder consent of 75% votes minimum, and even if granted, Ferguson would need a separate shareholder vote to cancel its London premium listing.

The second option is to seek shareholder approval for a primary listing in the US. Ferguson would seek a change of primary listing of Ferguson's ordinary shares to a major US stock exchange.

NMC Health was up 1.9% after the firm said it knew of no specific reason behind Monday's share price decline.

The UAE-focused healthcare provider closed down 20% on Monday.

"The independent review being undertaken by Freeh Group International Solutions LLC, announced on January 17, 2020, is proceeding. The company's operations continue to perform strongly and the company expects to report full-year 2019 results in-line with management's expectations," NMC said in a statement on Tuesday.

In January, NMC appointed Freeh Group International Solutions to review allegations made by short-selling firm Muddy Waters Capital. Muddy Waters in December decided to short sell shares in NMC over "serious doubts" regarding financial statements.

In the FTSE 250, Micro Focus International sank 17% as its chair stepped down amid a disappointing performer for its 2019 financial year.

The enterprise software company said that Kevin Loosemore will be standing down as chair on February 14, after 15 years in the role. Greg Lock, former chair of Computacenter, has been appointed the company's new chair, effective from the same date.

For the 12 months ended October 31, 2019, the FTSE 250-listed company reported revenue of USD3.35 billion, down 29% from USD4.75 billion in the 18 months to October 31, 2018. Company-compiled consensus saw revenue at around USD3.37 billion.

Annual adjusted earnings before interest, tax, depreciation and amortisation amounted to USD1.36 billion for the 12 months. Consensus saw adjusted Ebitda to be around USD1.37 billion.

For the current financial year, Micro Focus predicts revenue to be 6% to 8% lower year-on-year on constant currency basis. The company also expects increased investments to hit adjusted Ebitda margins in financial 2020 and 2021.

By Lucy Heming; lucyheming@alliancenews.com

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