27th Oct 2015 08:37
LONDON (Alliance News) - Shares in London opened lower Tuesday morning, dragged down by mining stocks, but with BP leading the blue-chip gainers even though it reported a steep drop in earnings and revenue in the third quarter of the year.
The FTSE 100 index was down 0.4% at 6,389.42 points, the FTSE 250 down 0.3% at 17,126.17, and the AIM All-Share down 0.2% at 746.96. In Europe, the CAC 40 index in Paris was down 0.4% and the DAX 30 in Frankfurt was down 0.5%.
Oil giant BP, up 1.5%, said the decline was as a result of lower world oil prices, but said it is committed to sustaining its dividend and plans to have "balanced cashflows" by 2017.
The oil and gas major reported a replacement cost profit of USD1.23 billion in the third quarter of 2015, a steep fall from the USD2.38 billion profit reported a year earlier as revenue fell to USD55.87 billion from USD94.76 billion.
Revenue fell due to the drop in oil prices, which offset a 4.4% year-on-year rise in production during the quarter, which ended September 30. Pretax profit dropped to USD865.0 million in the quarter compared to USD2.61 billion a year ago.
Also in the green, St James's Place was up 0.6%. The wealth manager said its net inflow of funds under management improved year-on-year in the third quarter, as the group continues to grow its business.
St James's said its net inflow of funds under management in the quarter to the end of September was GBP1.48 billion, up from GBP1.26 billion in inflows a year earlier. For the first nine-months of the year, its total net inflows were GBP4.15 billion, up from GBP3.70 billion in 2014.
Total funds under management for the company increased to GBP54.5 billion at the end of the quarter, up from GBP49.1 billion a year earlier.
Shares in WPP were rebounding from the losses seen Monday, up 0.8%. The advertising and media buying company ended down 2.2% on Monday, even though it predicted a strong end to 2015 after seeing revenue rise in its third quarter, as concerns about digital advertising and the economic slowdown in China cast shadows across the future.
Also taking back previous losses was TalkTalk Telecom Group, which led mid-cap gainers, up 4.3%. A 15-year-old boy was arrested on Monday in Northern Ireland over the cyber-attack on TalkTalk Telecom Group last week. The company's share price has plunged following the attack, amid concerns about reputational damage and potential compensation claims.
Scotland Yard said officers from the Police Service of Northern Ireland, working with detectives from the Metropolitan Police Cyber Crime Unit, arrested the boy from a house in County Antrim on suspicion of Computer Misuse Act offences. The identity of the suspect has not been disclosed and he has been taken into custody at a Country Antrim police station.
A spokesperson from TalkTalk confirmed the company had been informed by the Metropolitan Police of the arrest of a suspect in connection with the cyber-attack, which the company said last week may have compromised the bank details of its customers.
Among top fallers were mining stocks, with Anglo American down 2.9%, BHP Billiton down 2.5%, Glencore down 2.1% and Rio Tinto down 1.9%.
Preliminary readings of UK third-quarter gross domestic product are likely to grab UK investors' attention at 0930 GMT.
"Today's first...estimate will provide a useful reality check on the extent of the recent slowdown in economic growth," says Rhys Herbert, senior economist at Lloyds Bank.
"PMI data point to a fairly sharp deceleration in UK growth over recent months. However, as official data have not slowed to anywhere near the same extent, we expect an initial estimate of Q3 growth of 0.6%, only just below the Q2 rate of 0.7% and still above most economists? estimates of the sustainable rate of GDP growth," adds Herbert.
According to FXStreet.com, economists' expectations are for the annual figure to come in at 2.4%, unchanged from the level posted in the second-quarter.
Oanda analyst Craig Erlam believes that manufacturing and construction, which make up around a fifth of the UK economy, are likely to drag on growth as they have not performed well between July and September.
"Manufacturers are still facing tough headwinds from the slowdown in the global economy and the effect of the strong pound, which makes them less competitive," says Erlam.
In Asia on Tuesday, the Japanese Nikkei 225 index closed down 0.9%. In China, the Shanghai Composite ended down 0.2%, while the Hang Seng in Hong Kong finished up 0.1%.
China's industrial profits dropped marginally in September from a year ago, figures from the National Bureau of Statistics showed Tuesday. Industrial profits edged down 0.1% year-on-year in September, much slower than the sharp 8.8% decrease in August.
Wall Street ended mixed Monday. The Dow 30 index closed down 0.1%, the S&P 500 ended down 0.2% and the Nasdaq Composite finished up 0.1%. On Tuesday, third-quarter updates from technology giants Apple and Twitter are expected after the US market close.
In a busy US economic calendar, durable goods data are scheduled for 1230 GMT, with the latest Redbook index figures and S&P/Case-Shiller home prices indices data expected shortly after at 1255 GMT and 1300 GMT, respectively. US Markit services and composite purchasing managers' index readings are expected at 1345 GMT, followed by US consumer confidence data at 1400 GMT.
The US Federal Reserve starts its two-day monetary-policy meeting, with its outcome expected to be published after the UK market close on Wednesday.
By Daniel Ruiz; [email protected]
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