UK stocks eked out modest gains in a subdued start to trading on Tuesday as various mining stocks created a headwind and investors digested a mixed batch of earnings releases, including positive updates from BP (BP.) and HSBC (HSBA) and disappointing ones from Whitbread (WTB) and Aveva (AVV).
By 8.20 am, the FTSE 100 traded a mere 0.1% higher at 6,970.55 points while the FTSE 250 was down 0.1% at 22,560.1.
Oil prices traded higher with WTI back above $62 as OPEC’s technical committee stuck to an optimistic view of demand growth, whilst also cautioning about the surge in Covid cases in India, as copper prices hit a fresh 10-year high.
BP rallied 2.2% to 303p after the oil major said it would start a $500 million share buyback programme in the second quarter after reporting a forecast-beating rise in first quarter profit and delivering on its net debt reduction target ‘around a year early’.
‘The execution of our growth and transformation plans is proceeding well,’ insisted CEO Noel Quinn, adding that ‘the economic outlook has improved, although uncertainties remain. We carry good momentum into the second quarter, while maintaining conservative positions on capital, funding, liquidity and credit.’
Premier Inn hotel chain owner Whitbread fell 1.8% to £33.51, having racked up a £1 billion annual loss after the pandemic devastated the tourism sector.
Whitbread said 92% of its UK hotels are now open and that it is banking on a surge in British ‘staycations’ to improve its fortunes during the upcoming summer.
Engineering and industrial software company Aveva reversed 3.7% to £37.62 on revealing that its full year revenue was flat, following a partial recovery in the second half.
SERCO UPGRADES GUIDANCE
Support services firm Serco (SRP) improved 3.1% to 146p as it upgraded full year guidance and announced the completion of its WBB USA defence services acquisition as well as two UK contract wins with the Department for Work & Pensions (DWP) worth some £350 million over a four and a half years.
The Carex-to-Morning Fresh maker reported year-on-year sales and profit growth in all regions, a further drop in net debt and assured investors it is ‘on track to perform in line with the current range of market expectations’ for the full year.
OTHER RISERS AND FALLERS
Music and audio products play Focusrite (TUNE:AIM) skipped 7% higher to £12 as investors liked the sound of a large rise in first half profit after sales almost doubled due to a surge in demand for home-based audio gear during Covid lockdowns.