London pre-open: Stocks to nudge up as HSBC, BP report
London stocks were set to nudge higher at the open on Tuesday following heavy losses in the previous session, as concerns about the Covid-19 pandemic and related restrictions continue to dominate markets.
The FTSE 100 was called to open five points higher at 5,797, with results from the likes of BP and HSBC in focus.
CMC Markets analyst David Madden said: "Yesterday, the DAX 30 fell to a level last seen in June, but that was partially to do with the major sell-off in SAP. Keep in mind, the FTSE 100 hit its lowest level since May last week. The US markets finished in the red too, and the S&P 500 dropped to a level last seen in early October.
"Lately, the talks between Nancy Pelosi, the House Speaker and Steven Mnuchin, Treasury Secretary, have been in focus as they have been discussing the proposed coronavirus stimulus package. It is understood that Senate Republicans are not content with the size of the schemes they are discussing, so it seems unlikely that anything will be achieved before the presidential election.
"Equity markets in the Far East are mixed. The Hang Seng is the worst performer, but keep in mind it was closed yesterday, so it seems that it is playing catch up with the rest of the world. The Nikkei 225 is a little lower, while stocks in mainland China are fractionally higher. It reported that Chinese industrial profits increased by 10.1% last month, on an annual basis – which slowed from the 19.1% growth registered in August. Stock markets in Europe are tipped to recover slightly."
In corporate news, HSBC Holdings said it planned to move to a fee-based businesses model as it unveiled a less-than-expected 35% fall in third quarter profits.
Pre-tax profit for the three months to September 30 came in at $3.1bn, compared with a $2.07bn average of analysts' estimates compiled by the bank.
Losses from bad loans were forecast to be at the lower end of the $8bn - $13bn range set out earlier this year, HSBC said.
"This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low," the bank added.
BP saw its losses narrow sharply over the three months to September thanks to the absence of "significant" exploration write-offs or impairment charges.
On a reported basis, the oil major posted -$0.5bn of red ink for the quarter, which compared favourably with the $16.8bn in losses that it turned in during the preceding quarter.
In underlying terms, it even managed to turn in a profit of $0.1bn on a replacement cost basis, with the bottom line helped by the absence of big write-offs together with the recovery in oil and gas prices, and demand. The group's trading arm however posted a significantly lower oil trading result.
Whitbread posted a 76.9% plunge in revenue in its first half to £250.8m, as it swung to an adjusted loss of £376.4m, from a profit of £235.6m last year.
The Premier Inn operator said that reflected the closure of the majority of its hotels and restaurants for a large part of the period. It said that UK occupancy levels had steadily improved on a weekly basis since reopening, averaging 51% in August, while UK restaurant performance was boosted by the impact of the ‘Eat Out to Help Out’ scheme.