LONDON MARKET MIDDAY: Stocks Continue To Climb; US Tech Earnings Ahead

(Alliance News) - Stock prices in London were higher at midday on Tuesday though disappointing results from BP was stifling the FTSE 100, while earnings season in New York continues apace with a slew of household names due to update the market.

Sentiment was lifted as US President Joe Biden on Monday held a meeting with a group of Republican lawmakers to discuss their stimulus counter-proposal as the new administration looks to push through a bipartisan deal.

The USD600 billion plan pushed by Republicans is less than a third of the one put forward by the White House, and includes smaller handouts and no provision for state and local governments - two issues that Democrats are likely to reject.

The talks ended with no agreement but Republican Senator Susan Collins described them as "frank and very useful".

The flagship FTSE 100 index was up 29.16 points, or 0.2%, at 6,495.61. The mid-cap FTSE 250 index was up 206.86 points, or 1.0%, at 20,599.48. The AIM All-Share index was up 1.2% at 1,185.50.

The Cboe UK 100 index was up 0.5% at 645.35. The Cboe 250 was up 1.4% at 18,220.31 and the Cboe Small Companies up 0.7% at 12,194.54.

In mainland Europe, the CAC 40 in Paris was up 1.6%. The DAX 30 in Frankfurt was up 1.4%.

US stock market futures were pointed to a higher open. The Dow Jones Industrial Average was called up 0.7% and the S&P 500 and Nasdaq Composite both called 0.8% higher.

Ahead in the US earnings calendar Tuesday, there are fourth-quarter results from Covid-19 vaccine producer Pfizer. In addition, e-commerce company Amazon.com and Google parent Alphabet report after the market close in New York.

"Hopes of a big fiscal stimulus package continue to drive markets over the medium-term, while tech stocks will be looking forward to Alphabet and Amazon's earnings tonight, after a fairly quiet start to the week in terms of company earnings," said IG Group's Chris Beauchamp.

On the London Stock Exchange, hotel operators Whitbread and InterContinental Hotels were the best blue chip performers, up 4.5% and 4.1% respectively, as the UK presses ahead with its mass vaccination rollout.

"The best performers on the FTSE 100 are the likes of Whitbread, Intercontinental Hotels, as optimism grows that the UK's vaccination program will bring about an earlier easing of restrictions, which these particular brands will be able to take advantage of in the form of stay-at-home holidays," said CMC Markets analyst Michael Hewson.

At the other end of the large caps, gold and silver miner Fresnillo was the worst performer, down 5.1%, as the price of silver retreated from eight-year highs reached on Monday.

Silver was priced at USD27.66 an ounce Tuesday at midday in London, down from USD28.59 at the close Monday. The precious metal breached the USD30 mark on Monday to hit its highest level in eight years as users on Reddit forum r/WallStreetBets intensified calls for a short-squeeze on the commodity, shifting their focus from video game retailer GameStop.

Analysts at ActivTrades said: "Effectively, after attacking two little fish, retail investors have jumped on a whale. The growing size of the prey however, also increases the risks for the hunters. If this situation were to go on for a long time, regulatory intervention cannot be excluded. On the one hand, the authorities could start sanctioning abuses or otherwise restricting trading on margins (thus further limiting leverage).

"On the other hand, an attack on raw materials could have repercussions for inflation in the medium term. This would worry the central banks greatly and could push them to sell some of their reserves or to raise interest rates, in order to calm things down. And this would hurt small investors in the process."

BP was down 3.3% after the oil major swung to an annual loss following a tumultuous year in which the global oil and gas industry faced severe challenges.

For 2020, BP swung to a replacement cost loss of USD18.10 billion from an RC profit of USD3.52 billion in 2019 on revenue of USD183.50 billion, down 35% from USD282.62 billion.

BP declared a fourth quarter dividend of 5.25 US cents, in line with the second and third quarter payouts, but halved from 10.25 cents in the fourth quarter 2019. This brings the full-year payment to 31.50 cents, down 23% from 41.00 cents in 2019.

Brent oil was priced at USD57.76 a barrel on Tuesday midday, up sharply from USD55.82 at the London equities close Monday. The North Sea benchmark was trading around USD68 a barrel at the start of 2020, but collapsed to a low of USD15.97 in April due to the Russia-Saudi Arabia oil price war.

Elsewhere, Moonpig Group shares began trading in London, with the online greeting card retailer sizing up inclusion in the FTSE 250 index.

Moonpig priced its initial public offering at 350 pence per share, issuing 5.7 million new shares, raising GBP20 million, with existing investors selling 134.6 million shares. It meant the total offer size was GBP491.2 million.

Immediately following admission, the company said it would have market capitalisation of around GBP1.2 billion.

On Tuesday in London, Moonpig shares shot up to 437.60p each, 25% higher than its IPO price, giving it a market value of around GBP1.49 billion.

Moonpig has thrived while peers such Clintons and Paperchase have struggled due to lockdown measures forcing closures and emptying high streets across the UK.

The pound was quoted at USD1.3678 on Tuesday at midday, up from USD1.3666 at the London equities close Monday.

The euro stood at USD1.2032, down from USD1.2076. Against the yen, the dollar was trading at JPY105.01, up slightly from JPY104.95.

Gold was quoted at USD1,845.81 an ounce at midday Tuesday, down from USD1,860.90 late Monday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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