Paragon Bank interim profits rise, British American Tobacco hikes guidance

London open

The FTSE 100 is expected to open seven points lower on Tuesday, having closed up 0.12% on Monday at 7,077.22.

Stocks to watch

Buy-to-let specialist lender Paragon Bank on Tuesday reported higher interim profits and a £40m share buyback as the housing market recovered from the Covid pandemic. The company posted a 68.8% rise in profits to £96.4m and declared a 7.2p-a-share dividend for the six months to March 31.

British American Tobacco increased its guidance for annual revenue growth at constant currency to more than 5% from an earlier forecast of 3-5% as it attracted more non-combustible product customers and reported a solid performance for tobacco brands. The FTSE 100 group said it acquired 1.4 million customers for vaping and other non-combustible products during the first half and that it gained market share across all three categories. Combustible revenue was supported by a recovery in emerging markets such as Bangladesh and Pakistan and strong constant currency growth in the US.

Oxford Instruments reported revenue growth of 1.7% at constant currency to £318.5m in its preliminary results on Tuesday, against a “challenging” backdrop. The FTSE 250 company said its adjusted operating profit was ahead 13.3% at constant exchange rates to £56.7m, while its dividend for the year was set to come in at 17p per share, comprising an interim dividend of 4.1p and a proposed final dividend of 12.9p.

Newspaper round-up

The government must convince commercial landlords to forego some of the rent built up during the pandemic or face a wave of insolvencies when payments fall due in July, business leaders have warned. Speaking at a Treasury select committee hearing, trade body bosses in travel, hospitality and retail said the easing of restrictions was not enough to avoid business failures and job losses in debt-laden sectors. - Guardian

Sadiq Khan is preparing to cut Tube and bus services, axe jobs and close departments at Transport for London as he scrambles to fill a gaping hole in the capital’s public transport budget. The London mayor must save £900m a year under the terms of TfL’s latest bailout from Westminster after its business model was wrecked by Covid. - Telegraph

Rishi Sunak, the Chancellor, has vowed that the City will remain "competitive and dynamic" despite Brussels bid to steal its crown, in a private call with bank bosses. Speaking alongside Prime Minister Boris Johnson and the Governor of the Bank of England, Mr Sunak told listeners that the financial services industry is seen as a "crown jewel" and the country will fight to protect it. - Telegraph

Apple is taking on the likes of Zoom and Google with new changes to its FaceTime video-calling app, as it tries to gain a slice of the booming video conference call market. At its annual developers’ conference last night, Apple announced that FaceTime would be available on the web so that users could join calls from Android devices and Windows PCs. Apple’s video-calling service previously had been available only on iPhones, Macs and its other company devices, making it impossible to carry out video calls with friends and colleagues who do not use Apple products. - The Times

America’s top markets watchdog has said that it is closely monitoring volatility around so-called meme stocks for signs of illicit activity. The US Securities and Exchange Commission did not name any companies, but issued its statement as shares in AMC Entertainment, the world’s largest cinema chain, rallied by a fifth. - The Times

US close

Wall Street stocks turned a mixed performance on Monday despite ongoing optimism regarding the US economy reopening in the summer.

At the close, the Dow Jones Industrial Average was down 0.36% at 34,630.24, while the S&P 500 was 0.08% weaker at 4,226.52 and the Nasdaq Composite saw out the session 0.49% firmer at 13,881.72.

The Dow Jones closed 126.15 points lower on Monday, taking a bite out of gains recorded on Friday after a key jobs report showed the US unemployment rate had dropped to 5.8% as 559,000 jobs were added to the economy in May.

In focus throughout the session, G7 nations reached an agreement on global tax reform over the weekend, pushing for the world's largest firms to shell out a minimum of 15% tax on earnings, lower than Joe Biden's initial suggestion of a minimum 21% tax rate.

In the corporate space, tech stocks were in the green at the close, with the likes of Zoom and Tesla both higher at the end of trading and helping the Nasdaq Composite to a positive session, while Visa stock also traded higher on the back of an upgrade from analysts at Piper Sandler.