(Sharecast News) - London stocks were set for a muted open on Tuesday following strong gains in the previous session, with results from the likes of BP and Diageo in focus.
The FTSE 100 was called to open four points lower at 6,028, having rallied more than 2% on Monday.
CMC Markets analyst David Madden said: "Dealers in Europe and the US were hopeful that a deal would be struck in regards to the US $1 trillion stimulus package, even though there weren't any positive sounds coming from Washington DC. Republicans and Democrats are still fighting over the details of the stimulus programme, but traders feel that some sort of compromise will be worked out in the end. Politicians have to be seen to put up a fight, but it wouldn't go down well with their respective voters if the negotiations came to nothing."
In corporate news, Diageo proposed an unchanged final dividend as the drinks company reported a 15% drop in underlying annual profit. Operating profit before exceptional items for the year to the end of June fell to £3.49bn from £4.12bn a year earlier as net sales dropped 9% to £11.75bn. Diageo recommended a final dividend of 42.47p a share, taking the annual payout to 69.88p a share - up 2%.
BP halved its quarterly dividend as it swung to a heavy second quarter loss in a "volatile and challenging environment" and announced a 10-fold increase in low carbon investment by the end of the decade. The company, which has been hit hard by a slump in oil prices caused by the coronavirus pandemic, declared a dividend of 5.25 cents a share, compared to 10.5 for the previous quarter as part of a new distribution policy. Its underlying replacement cost loss for the quarter was $6.7bn, compared with a profit of $2.8bn a year ago.
Babcock said that underlying operating profit in its first quarter was around 40% lower than last year. The FTSE 250 company said around half of that reduction was due to lower levels of productivity in the core business amid the Covid-19 pandemic, while Magnox, South Africa and land adjacent market businesses accounted for the other half. Order intake in the quarter was £0.7bn, and in July the firm secured around £500m of new contracts in its aviation business, which it said was helped by coronavirus delays in bid decisions starting to clear.
May 9 (Reuters) - Companies in freeports in Britain will not get to enjoy the full benefits of the new tax-efficient zones if they are exporting to certain countries including Canada, Norway, Switzerland and Singapore, the Financial Times reported...