2nd Feb 2021 08:51
(Alliance News) - Stock prices in London opened higher on Tuesday as investors were buoyed by hopes the Biden administration will be able to push through its ambitious aid package, while BP was weighing on the FTSE 100.
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 FTSE 100 index was up 12.70 points, or 0.2%, at 6,479.12. The mid-cap FTSE 250 index was up 86.13 points, or 0.4%, at 20,478.75. The AIM All-Share index was up 0.7% at 1,178.65.
The Cboe UK 100 index was up 0.3% at 644.35. The Cboe 250 was up 0.4% at 18,047.31 and the Cboe Small Companies up 0.1% at 12,120.54.
In mainland Europe, the CAC 40 in Paris was up 1.4% while the DAX 30 in Frankfurt was up 1.3%.
On the London Stock Exchange, DCC was the best blue-chip performer, up 5.1%, after the Irish support services firm said it saw strong performances across all of its divisions during the third quarter.
DCC said its operating profit for the third quarter ended December 31 was strongly ahead of the prior year despite the disruption and uncertainty caused by the global pandemic. DCC said it recorded strong organic operating profit growth, whilst also benefiting from acquisitions completed in the prior year.
At the other end of the large caps, BP was the worst performer, down 3.2%, 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 a RC profit of USD3.52 billion in 2019 on revenue of USD183.50 billion, down 35% from USD282.6 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 USD56.76 a barrel on Tuesday morning, up 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.
CMC Markets analyst Michael Hewson said: "The BP share price hit its lowest levels since the mid 1990's last year as a combination of a plunging oil price, and a reluctance to take difficult decisions eroded confidence in the company's ability to manage the twin challenges of restructuring its business, for a greener world, as well as coping with the aftershocks of a global pandemic that destroyed short term demand.
"It was therefore no surprise that in August they were finally forced to accept the inevitable and cut the dividend in half, with the only surprise it took them so long to come around to that decision."
Gold and silver miners Fresnillo and Polymetal International were down 2.9% and 2.5% respectively, as the price of silver retreated from eight-year highs reached on Monday.
Silver was priced at USD27.52 an ounce Tuesday morning 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.
"Investors are booking profit after a massive rally in silver prices over the last few days. Silver recorded two back to back weeks of positive gains on Friday, and yesterday, it had one of the biggest one-day percentage move since 2008. These were enough signals for investors to know that it is time for them to take some chips off the table. Today silver prices are down and it seems like retail traders aren't that enthusiastic as they were before. Reddit forums are also relatively less quiet on this issue," said AvaTrade analyst Naeem Aslam.
Gold was quoted at USD1,848.91 an ounce early Tuesday, down from USD1,860.90 late Monday.
Rentokil Initial was 1.0% lower after Berenberg started coverage on the pest control company with a Sell rating.
The pound was quoted at USD1.3688 on Tuesday morning, up from USD1.3666 at the London equities close Monday.
The euro stood at USD1.2082, up from USD1.2076. Against the yen, the dollar was trading at JPY104.86, lower from JPY104.95.
The economics calendar on Tuesday has eurozone GDP at 1000 GMT and the US Redbook index at 1355 GMT.
By Arvind Bhunjun; [email protected]
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