LONDON MARKET OPEN: BP And Whitbread Lead Gainers As FTSE 100 Rises

LONDON (Alliance News) - Shares in London opened mixed, with the FTSE 100 recovering some of Monday's losses, as hotel and coffee shop owner Whitbread and oil and gas major BP led blue-chip gainers amid a flurry of updates from UK blue-chip companies.

The FTSE 100 was up 0.2%, or 11.11 points, at 6,272.05. The FTSE 250 index of mid-caps was down 0.3% at 16,922.78, while the AIM-All Share was flat at 731.71.

Whitbread was the best blue-chip performer, up 3.3%, after reporting growth in profit in its recently-ended financial year driven by sales growth at both the Premier Inn and Costa brands, and said it is confident in making further progress in the new year.

The hotel and coffee shop owner said its pretax profit in the year ended March 3 grew to GBP487.7 million from GBP463.8 million the year before, as revenue rose to GBP2.92 billion from GBP2.61 billion.

BP shares were adding 2.5%. The oil company swung to a loss in the first quarter of 2016 compared to a year earlier, but its loss was an improvement on the fourth quarter of 2015. BP said its loss for the first quarter was USD583.0 million, compared to a USD2.6 billion profit a year earlier. The loss narrowed from the USD3.3 billion loss made in the fourth quarter of 2015.

Underlying replacement cost profit, the preferred measure for analysts, fell to USD532.0 million from USD2.58 billion a year earlier but again improved on the USD196.0 million profit in the fourth quarter.

Total production in the quarter was 2.43 billion barrels of oil equivalent per day, up 5.2% year-on-year. BP expects production in the second quarter to fall against the first, reflecting seasonality and maintenance activity on its assets. BP said it would pay a 10.00 US cents dividend for the quarter, flat year-on-year.

British American Tobacco was up 2.3%. It reported growth in revenue in the first quarter of 2016, but warned that adverse foreign exchange rates could hit profit in the full year. BAT said revenue in the three months ended March 31 grew by 1.7% on the same period the prior year, although this was held back by unfavourable movements in foreign exchange rates. Revenue would have grown by 7.5% at constant currencies.

BAT noted that the trading environment remains challenging due to continued currency volatility, which is estimated to lead to a profit headwind of 7% and consequent impact on operating margin in the full year. It did note, however, that if sterling stays at the current rate for the rest of the year, it should lead to a 3% benefit to earnings.

Shares in St James's Place were up 1.9% after the wealth manager shrugged off stock market volatility in the opening months of 2016, reporting higher funds under management in the first quarter. Net inflows of client funds amounted to GBP1.36 billion in the three months ended March 31, versus GBP1.32 billion the corresponding quarter a year earlier.

That helped to boost funds under management to GBP62.02 billion at the end of March, from GBP58.61 billion at the start of the quarter and GBP55.81 billion a year earlier. St James's Place had a GBP0.79 billion net investment return in the first quarter, versus GBP2.48 billion the corresponding quarter a year earlier.

Moody's Investors Service upgraded its rating on travel company TUI on Monday to Ba2 from Ba3 following a robust performance for the group in its 2015 financial year, to the end of September, and the first quarter of its new year. This was boosting the travel company's shares, up 0.9%.

"Our decision to upgrade TUI's ratings reflects the company's strong operating performance in fiscal year 2014-15 and Q1 of the current fiscal year, as well as its continued resilience to geopolitical events," said Sven Reinke, vice-president and senior credit officer at Moody's.

In the FTSE 250, shares in Cobham were down 19% after it said trading in the first quarter missed its expectations and said it will launch a GBP500.0 million rights issue of shares in the second quarter of 2016. The defence technology company said its trading profit in the first quarter was GBP15.0 million, well behind the GBP50.0 million made in the first quarter of 2015.

Travel company Thomas Cook was down 3.6% having been downgraded to Neutral from Overweight by JPMorgan.

Meanwhile, engineer Smiths Group was up 0.9%, benefiting from an upgrade to Outperform from Neutral by Credit Suisse.

Still ahead in the UK corporate calendar, emerging-markets lender Standard Chartered, down 0.4%, releases its first-quarter results at 0915 BST.

The CAC 40 index in Paris was up 0.5%, while the DAX 30 in Frankfurt was up 0.6%.

In Asia, the Japanese Nikkei 225 index ended down 0.5% on Tuesday. In China, the Shanghai Composite closed up 0.6%, while the Hang Seng index in Hong Kong is down 0.3%.

"Most Asian equity markets fell for the second successive day amid nervousness ahead of this week's central bank meetings," said Lloyds Bank economist Rhys Herbert.

The two-day monetary policy meeting of the US Federal Reserve is scheduled to start later in Tuesday, with the decision expected to be announced on Wednesday at 1900 BST. Meanwhile, the Bank of Japan will announce its monetary policy decision on Thursday.

Also in the economic calendar Tuesday, British Bankers' Association mortgage approvals are due at 0930 BST.

"Today's BBA March housing transactions figures...are likely to show a spike in the market. At least some of this, however, will be due to transactions being brought forward ahead of the rise in stamp duty on second homes implemented in April," Lloyds's Herbert said. "As a result, it will be difficult to work out the underlying strength of the UK housing market over the next few months."

BBA mortgage approvals are expected to rise to 46,100 in March, according to FXStreet.com, from the 45,892 in February.

In the US, durable goods data are at 1330 BST. The Redbook index is due at 1355 BST, while Markit's US services Purchasing Manager's Index is at 1445 BST. US consumer confidence data are at 1500 BST, as well as the Richmond Fed manufacturing index.

By Daniel Ruiz; danielruiz@alliancenews.com

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