15th Feb 2022 07:59
(Alliance News) - Stock prices in London are seen opening lower on Tuesday, though hints of lowered tensions on the Russia-Ukraine border could be supportive for equities, which had started the week sharply lower.
Russia held the door open Monday to further talks on resolving its standoff with the West and said some of its military drills were ending, signalling a possible easing of the crisis over Ukraine.
"There is a certain relief in the Ukraine-Russia crisis as the two sides seem willing to continue their diplomatic efforts to avoid a military action. The latter could help reversing a part of yesterday's aggressive selloff in the European markets, and the FTSE 100 could outperform its peers on the back of firm energy and oil prices," Swissquote analyst Ipek Ozkardeskaya.
IG futures indicate the FTSE 100 index will open 19.3 points, or 0.3%, lower at 7,512.29. The large-cap index closed down 129.43 points, or 1.7%, at 7,531.59 on Monday.
In early UK corporate news, Glencore joined fellow miner BHP in reporting improved earnings, although it said it has set aside USD1.50 billion worth of provisions for regulatory probes in the US, UK and Brazil. Plus500's earnings declined in 2021, but it still announced a new share buyback worth USD55.0 million.
Also out were numbers showing the UK job market was steady at the end of last year.
According to the Office for National Statistics, the UK unemployment rate stood at 4.1% in the three months to December, unchanged from the three months to November.
Miner and commodities house Glencore said revenue jumped 43% to USD203.75 billion in 2021 from USD142.34 billion the year earlier.
The FTSE 100-listed company swung to a pretax profit of USD7.38 billion from a loss of USD5.12 billion in 2020.
Adjusted earnings before interest, tax, depreciation and amortisation leapt 84% to a record USD21.32 billion.
Glencore set out plans for USD4.0 billion worth of shareholder returns. Of this, USD3.4 billion will come from a USD0.26 per share base distribution in respect to 2021 cash flow, and USD550 million through a share buyback. Glencore did not pay a dividend in 2020.
The miner, however, had to set aside a USD1.50 billion provision for probes involving the US Department of Justice, the US Commodity Futures Trading Commission, the UK Serious Fraud Office, and the Brazilian Federal Prosecutor's Office.
The US DoJ is investigating Glencore's compliance with various criminal statutes, including money laundering and fraud laws. The CFTC's probe is in connection with charges of market manipulation in commodities trading, while the UK and Brazil probes both are in connection with alleged bribery, the latter concerning Petrobras. Petrobras is a Brazilian state-owned petroleum company.
Earlier on Tuesday, BHP reported a "strong" set of interim results, leading to the miner declaring a bumper payout.
Revenue from continuing operations for the six months to December 31 rose 27% to USD30.53 billion from USD24.04 billion a year earlier.
Pretax profit increased 61% to USD14.49 billion from USD9.01 billion.
BHP declared a record interim dividend of USD1.50, up from USD1.01 a year before and beating forecasts of USD1.24.
The results were BHP's first since its corporate unification as BHP Group Ltd with its primary stock market listing in Sydney.
BHP shares closed down 0.3% at AUD48.18 on the ASX on Tuesday.
Contracts-for-difference trading platform Plus500 posted an annual earnings decline.
Pretax profit fell 26% to USD386.4 million in 2021 from USD523.3 million in 2020, as revenue fell 18% to USD718.7 million from USD872.5 million.
In the fourth quarter alone, however, revenue was 75% higher annually at USD161.1 million.
Annual revenue, meanwhile, was more than double 2019's USD354.5 million.
Plus500 lifted its annual payout by a third to USD1.1916 per share, from USD1.7823. In addition, it plans to conduct a new USD55.0 million share buyback in 2022. This includes a USD25.2 million new buyback and a USD29.8 million special share repurchase programme.
"The purpose of the new programme is to further emphasise the board's confidence in the prospects of Plus500 and reflects the robust financial position of the group, as highlighted by the group's operational and financial performance in FY 2021," Plus500 said.
In Asia on Tuesday, Tokyo's Nikkei 225 closed down 0.8%, while the S&P/ASX 200 fell 0.5%. The Shanghai Composite added 0.5%, though the Hang Seng in Hong Kong was 1.2% lower in late trade.
The dollar's gains on the pound and euro faded early Tuesday. Sterling was quoted at USD1.3530, firm on USD1.3520 late Monday. The euro stood at USD1.1317, up from USD1.1300. Against the safe-haven yen, the greenback fell to JPY115.31 from JPY115.58.
Brent oil was quoted at USD95.50 a barrel early Tuesday, up from USD94.70 a barrel late Monday. Gold stood at USD1,875.97 an ounce, up from USD1,865.30.
Still to come on the economic calendar are eurozone GDP figures at 1000 GMT and US producer prices at 1330 GMT.
By Eric Cunha; [email protected]
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