BP Fuels FTSE Higher as Wall Street Remains Closed

TUESDAY MARKET UPDATE: Tropical Storm Sandy ensured trading volumes were low on Tuesday but individiual items of good news helped push the FTSE higher in London

Holly Cook 30 October, 2012 | 7:48PM
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Expectations that European markets would suffer in the absence of US trading, as Wall Street were closed for the second consecutive day on account of Tropical Storm Sandy, failed to materialise on Tuesday. Instead, some upbeat economic news and better-than-expected corporate earnings helped push indices higher.

The FTSE 100 index added 55 points or just under 1.0% to close at 5,850, while the FTSE 250 index took on 34 points or 0.3% to 11,964.

Across the pond, US markets remained closed following the Monday landfall of Tropical Storm Sandy on the East Coast. The major exchanges have yet to state whether they will open Wednesday. 

Ahead of the London open today, the Bank of Japan announced a new bond-buying programme, launching QE9 only a few weeks after QE8, in what Angus Campbell, head of market analysis at Capital Spreads described as a “desperate bid” to prevent recession. The Nikkei 225 still fell by 1.0%, however, amid concerns of how much of an impact the easing will have on the country's economy. The Shanghai Composite gained 0.2%, while the Hang Seng fell by 0.4%. 

Closer to home, some rare good news emerged from Spain this morning, where GDP estimates revealed a contraction of just 0.3% versus forecasts for a 0.4% contraction in the third quarter.

And in London, numbers from index heavyweight  BP (BP.) fuelled the FTSE 100’s rise on Tuesday. The oil & gas major reported decent third-quarter results that were in line with our overall projections, though BP's segments performed slightly differently versus our analyst’s expectations.

Most notable was BP's downstream segment, which posted a quarterly profit of $3 billion, almost three times the previous quarter. This was driven by refining margins rising to almost $20 per barrel. Overall, results were solid, but investors should understand that BP remains in flux with lots of assets moving in and out of its portfolio.

Shares in BP topped the blue-chip leaderboard by close of business, settling 4.2% higher at 443p.

Among the mid-caps, Lonmin (LMI) led the FTSE 250 stocks, up 7.0% at the end of the day, after posting fourth-quarter results that allayed investor fears following a difficult year for the mining firm.

 

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Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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