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LONDON (Alliance News) - London stocks are set to open higher Tuesday, taking their lead from a rally on Wall Street Monday and despite lower earnings reported by energy giants BP and BG Group.
The main economic focus for the London morning session is likely to be on the latest UK construction Purchasing Managers' Index for January at 0930 GMT.
IG futures indicate the FTSE 100 to open 25.45 points higher at 6,808.0. The index closed up 0.5% at 6,782.55 on Monday, with oil companies benefiting and travel companies suffering from the stabilisation of the Brent crude oil price above USD50, while data revealed UK manufacturing sector growth remained strong in January.
Wall Street ended higher Monday. The DJIA closed up 1.1%, the S&P 500 ended also up 1.3% and the Nasdaq Composite finished up 0.9%.
In Asia on Tuesday, the Japanese Nikkei 225 closed down 1.3%. Hang Seng trades up 0.2%. The Shanghai Composite is trading up 2.5%.
Brent crude continued to remain significantly above the USD50 mark, and is quoted at USD55.52 a barrel ahead of the market open Tuesday, while US benchmark West Texas Intermediate is quoted at USD50.05 a barrel.
Stocks also are likely to be supported by easing of tensions between Greece and its debtors. The newly-elected Greek government outlined proposals on Monday for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders, the Financial Times reported on Monday.
"While the initial proposals could well run into obstacles with respect to EU rules about monetary financing, the fact that a new approach is being tried has to be welcome given how much of a disaster the current bailout program has been," says Michael Hewson, Chief Market Analyst at CMC Markets.
"The key question now is whether EU leaders and in particular the ones in Berlin, as well as the European Central Bank are prepared to give the new proposals a decent hearing over the next few weeks as the proposals are fleshed out, or whether they get dismissed," Hewson adds.
BG Group's fourth quarter earnings fell to USD915 million from USD1.13 billion, while full year earnings were down to USD4.03 billion versus USD4.37 billion. The company held its full year dividend at 28.75 cent per share. BG said it will spend between USD6 to USD7 billion in 2015 on capex.
BP reported a drop in earnings during the fourth quarter of 2014 and announced further cuts to its capital expenditure budget for 2015 and significant impairment charges as it reacted to the recent steep drop in oil prices.
The company slashed spending to USD20 billion in 2015 from USD26 billion and said underlying cost replacement profit for the fourth quarter ended December 31, was USD2.2 billion, significantly lower than the USD2.8 billion reported a year earlier, but higher than analysts had expected.
Aberdeen Asset Management said first quarter asset under management fell to GBP323.3 billion from GBP324.4 billion at the end of September. The company said first quarter gross inflows were GBP11.3 billion. It added that new business levels returned to normal in January.
There was also third quarter results from TalkTalk Telecom Group and full-year results from FTSE 250, online-only grocer Ocado Group.
In the economic calendar, UK Halifax House Prices are at 0800 GMT, while the UK Construction PMI is at 0930 GMT. The eurozone Producer Prices Index is at 1000 GMT and US Factory Orders are at 1500 GMT.
By Daniel Ruiz; danielruiz@alliancenews.com
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