17th Aug 2021 12:14
(Alliance News) - The FTSE 100 recovered from an opening decline to flash green by midday on Tuesday, boosted by a series of dramatic moves by miner BHP and better-than-expected jobs data from the UK.
"After extending yesterday's losses early on the FTSE 100 had recovered to regain parity in the first hour of trading on Tuesday," AJ Bell investment director Russ Mould said.
"Some well-received corporate results helped balance out wider downbeat sentiment linked to the signs of a Chinese slowdown which emerged at the beginning of the week and the turmoil in Afghanistan.
"UK jobs figures were a smidgen better than expected and certainly didn't contain anything to alarm the market. US retail sales are likely to draw focus later on."
The FTSE 100 index was up 12.25 points, or 0.2%, at 7,166.23 on Tuesday at noon in London, after having initially opened down 0.4%.
The mid-cap FTSE 250 index was up 60.24 points, or 0.3%, at 23,772.91. The AIM All-Share index was up 0.45 of a point at 1,260.59.
The Cboe UK 100 index was up 0.2% at 713.30. The Cboe 250 was up 0.3% at 21,616.08, but the Cboe Small Companies was 0.4% lower at 15,431.60.
The UK unemployment rate came in slightly lower than expectations in the second quarter of 2021, data from the Office for National Statistics showed on Tuesday.
The UK unemployment rate for the three months to June was estimated to be 4.7%, down a touch from 4.8% for the three months to May.
This improved upon market expectations, according to FXStreet, which saw the unemployment rate remaining unchanged. The UK jobless rate started 2021 at 5.0%, representing the three months to January.
The dollar was higher across the board.
The pound was quoted at USD1.3786 midday Tuesday, down from USD1.3850 at the London equities close Monday. The euro was priced at USD1.1766, down from USD1.1785. Against the Japanese yen, the dollar was trading at JPY109.27, up from JPY109.15.
In mainland Europe, the CAC 40 stock index in Paris was 0.5% lower and DAX 30 in Frankfurt was down 0.2%.
Flash data from the eurozone on Tuesday pointed to an improving economic picture for the single currency area, with new estimates affirming gross domestic product growth and a steady rise in employment.
For the second quarter, seasonally adjusted GDP increased 2.0% quarter-on-quarter in the euro area and by 1.9% in the EU, according to flash estimates by Eurostat.
The flash estimates were in line with market consensus, according to FXStreet. This compares to a first quarter GDP decline of 0.3% in the euro area and 0.1% in the EU.
Annually, second quarter GDP surged 14% in the euro area compared with a 1.3% drop in the previous quarter.
Both the annual and quarterly second-quarter GDP growth figures were largely in line with an earlier Eurostat estimate reported in July.
In addition, unemployment fell marginally in the second quarter.
The number of those in work increased by 0.5% in the euro area and by 0.6% in the whole of the EU in the second quarter, compared with the previous quarter. In the first quarter, employment had dropped 0.2% in both the euro area and EU, Eurostat said.
Capital Economics economist Jessica Hinds said: "The strong growth in the euro-zone GDP in Q2 is likely to be repeated in Q3 despite the spread of the Delta variant, and should bring the economy back towards its pre-virus size in the coming months. But the southern economies continue to lag, with travel restrictions still holding back their tourism sectors."
In London, BHP grabbed most of the headline. The stock was up 7.4% at midday.
BHP plans to unify its corporate structure under its Australian parent company and expects to move its primary listing to Sydney's Australian Securities Exchange in 2022, with the agreed oil asset merger with Woodside Petroleum to follow.
BHP plans keep a standard listing on the London Stock Exchange, a secondary listing on the Johannesburg Stock Exchange, and an American depositary receipt program on the New York Stock Exchange.
London and Melbourne-based BHP and Perth-based Woodside Petroleum have agreed to merge their oil and gas portfolios to create one of the 10 largest independent energy producers in the world and the largest listed in Sydney, the pair said on Tuesday.
BHP and Woodside had confirmed talks about such a combination on Monday. They said on Tuesday that, following the all-stock merger of the two oil and gas businesses, Woodside shareholders will have 52% of the new company and BHP shareholders 48%.
Woodside shares closed down 2.1% in Sydney.
Also on Tuesday, BHP announced a jump in pretax profit to USD24.60 billion in its financial year that ended June 30, up 82% from USD13.51 billion a year prior and 63% above the USD15.05 billion reported in financial 2019.
Revenue rose 42% year-on-year to USD60.82 billion from USD42.93 billion, beating the company-compiled consensus for USD59.71 billion.
BHP's revenue also was above pre-pandemic levels, up 37% from USD44.29 billion two years ago.
The global resource company issued a final dividend of 200 US cents per share for an overall annual dividend of 301.0 cents, at the higher end of analysts predictions and up sharply from 120.0 cents the previous year. In financial 2019, BHP issued a final dividend of 133.0 cents.
Just Eat Takeaway shares were up 2.8%. The company said profitability will start to improve from the second half of 2021, but it saw a wider first-half loss after heavy investments to battle food delivery rivals.
Revenue in the first half of 2021 more than doubled year-on-year to EUR1.77 billion from EUR675 million. The company's pretax loss widened to EUR395 million from EUR26 million. On a combined basis - including the acquired Just Eat and Grubhub businesses for both periods - revenue was up 47% to EUR2.61 billion from EUR1.78 billion.
Profit was hit by a jump in courier costs to EUR1.02 billion from EUR181 million, as Just Eat Takeaway expanded its delivery business to compete with rivals such as Deliveroo and Uber Eats.
Previously, Just Eat Takeaway took orders for restaurants who then delivered the food themselves.
In the midcaps, Plus500 was sitting atop the benchmark index, up 6.2%, despite a a first-half earnings decline, with the contracts-for-difference trading platform unable to match tough comparatives from a year earlier.
Plus500's revenue and profit topped pre-virus levels, however, and the FTSE 250 stock's rose as it also announced plans for another buyback.
Pretax profit fell to USD188.7 million in the six months that ended June 30 from USD363.2 million a year before. Revenue dropped 39% year-on-year to USD346.2 million from USD564.2 million.
However, earnings were sharply higher than in the first half of 2019, when Plus500 reported pretax profit of USD63.9 million on revenue of USD148.0 million.
Haifa, Israel-based Plus500 said active customers grew by 2% in the first half of 2021 to 333,940, but its new customer additions in the period dropped 31% to 136,980. Average revenue per user was down 40% to USD1,037.
Brent oil was quoted at USD69.26 a barrel Tuesday midday, up from USD69.15 late Monday in London. Gold was trading at USD1,794.70 an ounce, higher against USD1,786.04.
US stock market futures were pointed to a lower open, with focus on retail sales due at 1330 BST.
Headline sales are expected at down 0.3% month on month versus 0.6% growth in June, BBH Market notes, while sales ex-autos are expected to rise 0.2% month on month versus 1.3% growth in June.
The Dow Jones Industrial Average was called down 0.5%, while the S&P 500 was set to open 0.4% lower, and the tech-heavy Nasdaq Composite was seen down 0.3%.
By Paul McGowan; [email protected]
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