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(Alliance News) - Stocks in London are set for a lower open Tuesday, as oil major BP reported a quarterly loss following a number of difficulties in the Upstream unit.
IG futures indicate the FTSE 100 index will open 9.0 points lower at 7,322.28. The blue-chip index closed up 6.81 points, or 0.1%, at 7,331.28 on Monday.
The predicted lower open in London is despite more positive signs of a forthcoming US-China trade deal.
US President Donald Trump again Monday said a trade deal is imminent with Beijing which will help American farmers hurt by retaliation in the grinding conflict between the economic powers.
"We're looking probably to be ahead of schedule to sign very a big portion of the China deal, and we will call it phase one," Trump told reporters.
The deal will "take care of the farmers" as well as "some of the other things" like banking, he said in another of his impromptu briefings before departing on a trip to Chicago.
Washington and Beijing have exchanged blows for over a year, with tariffs now impacting hundreds of billions of dollars in two-way trade.
Also in focus on Tuesday in the US will be the start of the US Federal Reserve's two-day monetary policy meeting.
"The Fed is broadly expected to lower the interest rates by another 25 basis points. The expectation of a third rate cut in the US is reflected in asset prices up to 90%," said Ipek Ozkardeskaya at London Capital Group.
"Meanwhile, the good-looking third-quarter earnings point at an increasing possibility of a hawkish rate cut, meaning the Fed will likely serve the 25-basis-point cut with a hawkish accompanying statement at this week's banquet."
"This is what the US sovereign markets have been pricing in, along with Trump's announcement that the US is 'ahead of schedule' to sign a partial agreement with China at next month's APEC summit," she continued.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average closing up 0.5%, the S&P 500 0.6% higher, and the Nasdaq Composite 1.0% higher.
The Japanese Nikkei 225 index closed 0.5% higher on Tuesday. In China, the Shanghai Composite ended down 0.7% in late trade, while the Hang Seng index in Hong Kong is 0.5% lower.
In UK corporate news Tuesday, oil major BP posted a replacement cost loss for the third quarter of 2019 of USD351 million, after a USD1.78 billion profit in the second quarter and USD3.09 billion in the third quarter last year.
On an underlying basis, BP's RC profit fell to USD2.25 billion, down 20% on a quarterly basis and 41% year-on-year.
BP was hit by "significantly" lower earnings in the Upstream division on the back of lower commodity prices, maintenance work, and the impact of poor weather in the Gulf of Mexico. Downstream, BP said, had a "strong" quarter operationally.
Upstream production for the third quarter was 3.7 million barrels of oil equivalent per day, up from 3.6 million barrels a year before. However, underlying production, excluding BP's stake in Russia's Rosneft, fell 2.5%.
BP declared a 10.25 US cent dividend for the quarter while removing the scrip dividend alternative.
"BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts. Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP," said Chief Executive Bob Dudley.
"We're also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia."
In the FTSE 250, contracts-for-difference trader Plus500 reported a "strong improvement" in the third quarter compared to the second, with revenue growth 18% quarterly to USD110.6 million.
Year-on-year, Plus500's revenue increased 10%. Earnings before interest, tax, depreciation, and amortisation rose 39% year-on-year to USD70.1 million.
The company reported 18% growth in new customers year-on-year, though compared to the second quarter new customer numbers fell 7%.
Plus500 said performance has benefited from "geopolitical events" which has led to heightened trading activity.
Oil field services firm Hunting said trading conditions in the third quarter continued to be challenging, especially due to a slowdown in US onshore completions.
As a result, Hunting said 2019 Ebitda is likely to be at the lower end of market expectations.
The core Hunting Titan business delivered third-quarter revenue and operating profit below the figures recorded in the first and second quarters of 2019.
On the Brexit front, UK Prime Minister Boris Johnson is expected to call on members of Parliament once again to support his quest for a pre-Christmas election in order to break the Brexit deadlock.
Johnson has put his deal on hold in an anticipated bid to convince the Commons to vote on Tuesday for a December 12 election in his fourth time of asking.
But he may again be defeated with the date proving controversial for the Liberal Democrats and the SNP, who have signalled support for an election being held three days earlier.
The PM failed on Monday to get the two-thirds majority needed to secure an election under the Fixed-Term Parliaments Act, but was planning on a fresh attempt a day later.
"It wasn't a shock that Boris lost the vote, but there still might be a general election before Christmas. It is believed the Liberal Democrats plus the Scottish National Party are looking to introduce a bill that would only require a majority of MPs to call a general election," said David Madden, a market analyst at CMC Markets UK.
"It is understood the smaller opposition parties are seeking to hold an election on December 9, and the political process could kick off today."
The pound was quoted at USD1.2857 early on Tuesday, flat compared to USD1.2861 at the close on Monday.
UK house prices growth remained little changed in October amid a slowdown against a backdrop of global growth and Brexit uncertainty, data from building society Nationwide revealed Tuesday.
The Nationwide House Price Index rose to 429.1 points in October from 428.4 in September, meaning on a monthly basis prices rose 0.2% in October on September levels.
According to FX Street-compiled figures, economist consensus was for prices to have remained unchanged after dipping 0.2% in September.
On a year before, house prices were 0.4% higher in October. Economist consensus was for a print of 0.2% growth in October, in line with the 0.2% reported in September.
In the economic calendar there are UK mortgage approvals at 0930 GMT, Irish retail sales at 1100 GMT, and US consumer confidence at 1400 GMT.
By George Collard; georgecollard@alliancenews.com
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