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(Alliance News) - Stocks in London were called higher on Tuesday, as FTSE 100 heavyweight BP reported a surge in annual profit.
In economic news, UK house prices remained stable in January, according to Halifax's house price index. This follows a 1.3% monthly fall in December and a 2.4% drop in November. The typical UK property now costs GBP281,684, little changed from GBP281,713 in December.
On an annual basis, prices were 1.9% higher - the lowest level of growth in the last three years. In December, prices saw annual growth of 2.1%.
Compared to the peak back in August, UK house prices are 4.2% lower.
"We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years. As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand," said Kim Kinnaird, Halifax Mortgages director.
In early corporate news, BP said its annual profit more than doubled, while Morgan Advanced Materials warned that a recent cyber attack will hinder its annual performance.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 12.9 points, 0.2%, at 7,849.61
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Hang Seng: up 0.4% at 21,305.24
Nikkei 225: closed down 8.18 points at 27,685.47
S&P/ASX 200: closed down 0.5% at 7,504.10
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DJIA: closed down 34.99 points, 0.1%, at 33,891.02
S&P 500: closed down 0.6% at 4,111.08
Nasdaq Composite: closed down 1.0% at 11,887.45
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EUR: up at USD1.0742 (USD1.0737)
GBP: up at USD1.2051 (USD1.2026)
USD: down at JPY132.07 (JPY132.80)
Gold: up at USD1,875.43 per ounce (USD1,868.01)
Oil (Brent): up at USD82.17 a barrel (USD79.90)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 GMT Ireland industrial production and turnover
08:30 EST US international trade
08:55 EST US Johnson Redbook retail sales index
11:00 EST US Federal Reserve Board Chair Jerome Powell speaks
15:00 EST US consumer credit
16:30 EST US API weekly statistical bulletin
US President Joe Biden delivers State of the Union address
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UK retail sales growth slowed last month, with consumers reining in spending amid rampant inflation. According to the latest British Retail Consortium-KPMG tracker, UK retail sales rose by 4.2% on-year in January. Growth slowed markedly from 12% a year earlier. It was also down on the three-month average of 5.2%. On a like-for-like basis, sales rose 3.9% yearly in January, slower than the 4.9% three-month average. "With inflation running at around 10%, sales growth for January nearly halved in comparison to December to just over 4% - sending a clear signal that consumers have started the year with a tight rein on spending as they face another period of rising costs," KPMG analyst Paul Martin commented.
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BROKER RATING CHANGES
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Jefferies resumes Taylor Maritime Investments with 'buy'
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COMPANIES - FTSE 100
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Oil major BP said that in the fourth quarter total revenue rose to USD70.36 billion from USD52.24 billion a year before. Pretax profit was USD16.90 billion, quadrupling year-on-year from USD4.04 billion. Underlying replacement cost profit halved from the third quarter, at USD4.81 billion in the fourth quarter, compared to USD8.15 billion in the third, and USD4.07 billion in the fourth quarter of 2021. In 2022 as a whole, revenue surged to USD241.39 billion from USD157.74 billion, while pretax profit edged up to USD15.40 billion from USD15.23 billion. However underlying replacement cost profit, BP's preferred measure, more than doubled to USD27.65 billion from USD12.82 billion. Dividends increased to 6.610 cents for final quarter from 5.460 a year before. Looking ahead, BP expects oil prices to be supported by a recovery in demand from China, as well as low inventory levels and the uncertainty about the level of exports from Russia. In the first quarter of 2023, it expects reported and underlying upstream production to be broadly flat compared with 2022.
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COMPANIES - FTSE 250
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Specialist industrial product manufacturer Morgan Advanced Materials warned it expects around GBP8 million to GBP12 million in exceptional costs from the cyber attack it suffered last month. As a result of the disruption from the attack, Morgan expects adjusted operating profit for 2023 to be around 10% to 15% below previous expectations. More positively, Morgan expects its 2022 annual trading performance to be slightly ahead of market expectations. Revenue is expected to be around GBP1.1 billion, which is up 16% year-on-year. Adjusted operating profit is expected to be slightly above the top end of the market consensus range of GBP133.5 million to GBP145.0 million. The firm has pushed back the release of its 2022 results, which now will be released by the end of April.
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OTHER COMPANIES
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Tokyo-based SoftBank Group reported a surprise JPY783 billion, USD5.9 billion, net loss in the third quarter, as a slump in the tech sector hit the investor's bottom line. The firm's two Vision Fund investment vehicles alone lost JPY660 billion in the three months to December, "reflecting declines in the share prices of a wide range of portfolio companies," SoftBank said. SoftBank has made huge bets to find and grow hot new tech ventures around the world. But its exposure to so many tech firms has left its earnings vulnerable to fickle market forces, and its two Vision Funds have reported losses for four straight quarters. SoftBank said it swung to a net loss in the first nine months of financial 2023. Net sales in the nine months to December 31 rose 6.4% to JPY4.876 trillion, about USD36.89 billion, from JPY4.581 trillion a year prior. Notably, the company reported a loss on investments at SoftBank Vision Funds of JPY5.007 trillion, widened from JPY629.13 billion a year ago. SoftBank swung to a net loss of JPY758.24 billion from a profit of JPY649.29 billion. The 9-month diluted loss per share was JPY608.51, swung from diluted earnings per share of JPY207.57 a year earlier.
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By Elizabeth Winter, Alliance News senior markets reporter
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