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(Alliance News) - Stocks in London ended lower on Tuesday with steep falls from Standard Chartered and Flutter Entertainment weighing on the FTSE 100, while the Federal Reserve meeting gets underway.
The FTSE 100 index closed down 13.81 points, or 0.2%, at 7,274.81. The FTSE 250 ended down 71.22 points, or 0.3%, at 23,140.00 and the AIM All-Share closed down 1.32 points or 0.1% at 1,227.59.
The Cboe UK 100 ended down 0.3% at 721.10, the Cboe UK 250 closed down 0.3% at 20,707.90 and the Cboe Small Companies finished 0.2% lower at 15,573.40.
In Paris the CAC 40 stock index ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.9%.
"European markets have had an altogether more mixed tone today, with a string of disappointing earnings numbers weighing on sentiment, and weighing predominantly on the FTSE100, while the DAX and CAC40 have moved higher. While positive numbers are generally greeted with equanimity, misses or downgrades tend to get brutally punished, as Flutter Entertainment and Standard Chartered have found out to their cost today," said CMC Markets analyst Michael Hewson.
In the FTSE 100, AstraZeneca ended the best performer, up 3.1%, after Vietnam's VNVC signed a new contract to buy 25 million new doses of the drugmaker's Covid-19 vaccine. This brings the total number of doses ordered to Vietnam to more than 55 million.
Rentokil Initial closed up 1.9% after Berenberg raised the pest control and hygiene firm to Hold from Sell.
At the other end of the large-caps, Standard Chartered ended the worst performer, down 7.9%. The emerging-markets focused bank reported a jump in third-quarter profit amid "further progress".
Operating income rose to USD3.77 billion in the third quarter, up 7% year-on-year. Pretax profit jumped 44% to USD1.08 billion, helped as StanChart's credit impairment charge was reduced to USD107 million from USD353 million.
StanChart said it continues to expect full-year income "similar" to that achieved in 2020 on a constant currency basis. It expects credit impairment to remain at low levels in the fourth quarter. Its CET1 ratio at the full-year is seen around the top of the 13% to 14% range. This compares with 14.6% as at September 30.
"Standard Chartered beat expectations in its results this morning, but after a 24% bounce from the October low to yesterday's close, investors are relearning the phrase, 'it is better to travel than to arrive'. Still, there was plenty to like in the numbers, even if the outlook was rather cautious. But after the rally of the past month the bank was on a hiding to nothing really, some investors being bound to engage in profit-taking regardless of the actual figures and forecast," commented IG Group's Chris Beauchamp.
Flutter Entertainment ended down 5.0% after the gambling firm lowered its full-year earnings guidance range after a string of punter-friendly sports results in October.
Total revenue for the third quarter of the year was GBP1.44 billion, up 9% on GBP1.33 billion a year ago. Online revenue growth of 13% at constant currency was driven by Australia, up 20%, and the US, up 85%.
However the company, formerly known as Paddy Power Betfair, noted that it has seen unfavourable sports results in first 24 days of October.
This has hit earnings before interest, tax, depreciation and amortisation by around GBP60 million. Combined with an expected GBP10 million hit from a temporary Netherlands exit, it now expects adjusted Ebitda for 2021, for its operations excluding the US, in a range of GBP1.24 billion to GBP1.28 billion, versus prior guidance of GBP1.27 billion to GBP1.37 billion.
Bookmakers generally suffer when favourites win and Chief Executive Officer Peter Jackson on the conference call said this happened across the board last month, including Liverpool's 5-0 demolition of Manchester United in the Premier League.
In the US, net revenue guidance was unchanged but Flutter now expects an adjusted Ebitda loss of between GBP250 million and GBP275 million, versus a prior range of GBP225 million to GBP275 million. This includes a GBP15 million hit from adverse sports results in October.
BP closed down 2.3% even as the oil major pledged generous returns to shareholders, as investors focused on the societal duties the company has embarked upon to aid in the fight for climate change.
For the three months to September 30, total revenue increased 44% year-on-year to USD37.87 billion from USD26.26 billion, but posted a loss attributable to shareholders of USD2.54 billion, widening sharply from USD450 million in the third quarter last year.
Further, third quarter underlying profit on a replacement cost basis - the metric tracked by analysts - rose to USD3.32 billion from USD86 million last year due to higher oil and gas prices.
Turning to shareholder returns, BP announced plans for a further share buyback worth USD1.25 billion. It expects to complete this before announcing its fourth-quarter figures, and will outline plans for the final tranche of buybacks for 2021 surplus cash flow when releasing the results.
BP's third quarter payout increased 4.0% to 5.46 cents per share from 5.25 cents.
However, BP's financial gain from rising oil prices comes against a backdrop of heightened investor scrutiny as the oil major seeks to transition to becoming an integrated supplier of clean energy.
"Higher oil and gas prices are stoking BP's financial performance and leaving it with the cashflow to both invest in renewable and alternative energy sources and reward shareholders for their support. Environmental campaigners will welcome the former but argue that the money used for the latter could instead be deployed to accelerate the company's transition away from hydrocarbons," said AJ Bell's Russ Mould.
In the FTSE 250, TP ICAP ended the worst performer, down 10%. The interdealer broker said trading conditions improved in the third quarter, with the firm's revenue growth driven by a strong performance from its Energy & Commodities business.
In the three months to September 30, TP ICAP recorded total revenue of GBP447 million, up 15% from GBP388 million a year earlier. Total Global Broking revenue on the third quarter rose 2.4% to GBP252 million from GBP246 million, while Energy & Commodities revenue surged 16% to GBP92 million from GBP79 million.
Elsewhere in London, shares in THG dropped 9.2% to a record low of 197.40 pence after BlackRock sold a chunky stake following a torrid few weeks for the Manchester-based firm.
THG dropped 21% in one day alone in October after a disastrous capital markets day left analysts with more questions than answers. The beauty products retailer and e-commerce platform provider floated in September last year at an IPO price of 500p.
The pound was quoted at USD1.3614 at the London equities close, down from USD1.3675 at the close Monday.
The euro stood at USD1.1580 at the European equities close, down slightly from USD1.1589 late Monday. Against the yen, the dollar was trading at JPY113.81, down from JPY114.17.
Stocks in New York were higher at the London equities close as the Federal Reserve begins a crucial meeting set to reveal the start date for tapering of its vast cash stimulus that has supported the world's biggest economy through the pandemic.
The DJIA was up 0.2%, the S&P 500 index up 0.3% and the Nasdaq Composite up 0.2%.
On the corporate front, Pfizer was up 4.8% after the drugmaker lifted its 2021 profit and revenue outlook, bolstered by the latest surge in Covid-19 vaccinations, including regulatory approvals for boosters and shots for younger populations.
Brent oil was quoted at USD84.09 a barrel at the equities close, down from USD84.65 at the close Monday.
Gold stood at USD1,788.90 an ounce at the London equities close, marginally lower against USD1,790.75 late Monday.
The economic events calendar on Wednesday has services PMI readings from China overnight, the UK at 0930 GMT and the US at 1345 GMT. There is also US ADP hiring data at 1215 GMT.
The UK corporate calendar on Wednesday has third-quarter results from Irish corrugated packaging company Smurfit Kappa and soft drinks bottler Coca-Cola HBC. There is also a trading statement from clothing and homewares retailer Next.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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