(Alliance News) - London's FTSE 100 is called to open a touch lower on Tuesday, before central bankers move into focus, with both the Bank of England's Andrew Bailey and Federal Reserve Chair Jerome Powell due to speak.
Eyes also remain on tariff announcements, after US President Donald signed an order slapping tariffs on steel and aluminium entering the US.
"Fed Chair Powell heads to Capitol Hill for the first of two days of Congressional testimony, though Powell seems unlikely to deviate significantly from the 'no hurry to cut again' script used at the January FOMC meeting. BoE Governor Bailey also speaks today, in an intriguingly titled speech on 'underestimating changes in financial markets', which may be of particular interest given the MPC's 25bp cut, but stagflationary economic forecasts, delivered last week," Pepperstone analyst Michael Brown commented.
In early UK corporate news, BP reported a profit decline ahead of a key strategy update later this month. Gambling firm Entain said its chief executive has stepped down after less than six months in the role.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.1% at 8,760.20 points
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Hang Seng: down 0.9% at 21,325.70
S&P/ASX 200: up marginally at 8,484.00
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DJIA: closed up 167.01 points, 0.4%, at 44,470.41
S&P 500: closed up 0.7% at 6,066.44
Nasdaq Composite: closed up 1.0% at 19,714.27
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EUR: lower at USD1.0303 (USD1.0311)
GBP: lower at USD1.2347 (USD1.2381)
USD: higher at JPY151.93 (JPY151.75)
GOLD: higher at USD2,907.74 per ounce (USD2,903.38)
(Brent): higher at USD76.41 a barrel (USD75.88)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:45 GMT Bank of England Monetary Policy Committee member Catherine Mann speaks
12:15 GMT Bank of England Governor Andrew Bailey speaks
15:00 GMT US Federal Reserve Chair Jerome Powell speaks
20:30 GMT US Federal Reserve Governor Michelle Bowman speaks
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UK retail sales improved in January, a survey showed, though still failed to recover the dulled "golden quarter" from the Christmas trading period. According to the BRC-KPMG retail sales monitor covering the five weeks from December 29 to February 1, total UK retail sales rose 2.6% in January, slowing from a 3.2% growth in December but improving from a 1.2% growth in January 2024. Retail sales in January were above the 3-month average growth of 1.1% and exceeded the 12-month average growth of 0.8%. "January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable," said Helen Dickinson, chief executive of the British Retail Consortium. Food sales were up 2.8% on-year in January, worsening from a 6.1% rise last year and falling short of the 3% average over the last 12 months. Non-food sales, on the other hand, improved to a 2.5% growth for January, from a decline of 2.8% a year prior. This compared to a 3-month average rise of 0.2% and a 12-month average decline of 1.1%. In-store non-food sales edged up 2.6% on-year, against a decline of 2.0% in January 2024, while online non-food sales increased 2.2% against an on-year decline of 4.2%. In-store non-food sales averaged a twelve-month decline of 0.7%, and online non-food sales averaged 0.1% growth. Linda Ellet, UK head of consumer, retail & leisure at KPMG, said: "2025 got off to a welcome start for retailers with much-needed sales growth in January. But viewed over a three-month period that included Christmas and Black Friday, non-food sales have flatlined. Overall, the golden quarter failed to shine." Ellet continued: "The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high. Business costs are also coming under pressure, with rising employment costs only increasing that in the coming months."
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BROKER RATING CHANGES
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Peel Hunt raises Fevertree to 'hold' (reduce) - price target 725 (650) pence
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COMPANIES - FTSE 100
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Oil major BP reported weaker fourth-quarter profit, but maintained its USD1.75 billion quarterly share buyback pace, ahead of a review of "elements of our financial guidance" later this month. BP reported pretax replacement cost profit of USD764 million for the final-quarter, tumbling 79% from USD3.57 billion a year prior. Underlying RC profit fell 61% to USD1.17 billion from USD2.99 billion. For the full-year, pretax RC profit declined 59% to USD11.79 billion from USD28.58 billion and underlying RC profit fell 36% to USD8.92 billion from USD13.84 billion. Fourth-quarter revenue was down 8.6% year-on-year to USD48.09 billion from USD52.59 billion. For the whole of 2024, it declined 8.6% also to USD194.63 billion from USD213.03 billion. Statutory pretax profit was 71% lower for the whole of 2024 at USD6.78 billion. For the final-quarter alone, it swung to loss of USD503 million from profit of USD1.10 billion. "In 2024 we laid the foundations for growth. We have been reshaping our portfolio - sanctioning new major projects, and focusing our low-carbon investment - and we have made strong progress in reducing costs. Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns. It will be a new direction for BP and we look forward to sharing it at our capital markets update on 26 February," Chief Executive Officer Murray Auchincloss said. At the strategy update later this month, BP will review its buyback pace. For now, it announced another USD1.75 billion share repurchase programme, prior to reporting first quarter results. BP added: "As part of our capital markets update scheduled for 26 February we intend to review elements of our financial guidance, including our expectations for 2025 share buybacks and capital expenditure." BP announced a 8.0 cents per share fourth-quarter dividend, up 10% from 7.27 cents a year prior. Its 2024 dividend amounted to 30.54 cents, up 10% from 27.76 cents. On Monday, Bloomberg reported that Elliott Investment Management has built a significant stake in BP, and has called on it to consider transformative measures. Looking to the first-quarter of the new year, BP said: "BP expects first quarter 2025 reported upstream* production to be lower compared with the fourth-quarter 2024 primarily due to the already announced divestments in Egypt and Trinidad, which completed towards the end of the fourth quarter and base decline in both regions, totalling around 90 thousand barrels of oil equivalent per day. In its customers business, bp expects seasonally lower volumes compared to the fourth quarter. In addition, bp expects fuels margins to remain sensitive to movements in cost of supply and earnings delivery to remain sensitive to the relative strength of the US dollar."
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Ladbrokes owner Entain said Gavin Isaacs has stepped down as chief executive officer with immediate effect, after only around five months in the role. Non-Executive Chair Stella David once again assumes the role of interim CEO, a post she held from December 2023 until September 2024. Pierre Bouchut, currently senior independent director, will become non-executive chair on an interim basis. David said: "Entain is making strong progress in delivering our strategic priorities. We would like to thank Gavin for his contribution. The board is pleased with the group's performance in 2024 and trading so far this year." Entain said it is "comfortable with market expectations" for 2025. Isaacs became CEO of the gambling firm on September 2. David had been interim CEO prior to that following the departure of Jette Nygaard-Andersen. Entain said Isaacs left the CEO role "by mutual agreement".
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COMPANIES - FTSE 250
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Dunelm reported its half-year earnings edged higher, and it announced Nick Wilkinson will step down from the CEO role. The homewares retailer said pretax profit in the half-year to December 28 inched up 0.2% to GBP123.2 million from GBP123.0 million. Revenue improved 2.4% to USD893.7 million from USD872.5 million. Dunelm upped its interim dividend by 3.1% to 16.5 pence per share from 16.0p. It also announced another 35.0p per share special dividend, like it did a year prior. Dunelm labelled it a "good performance in a challenging environment". "We remain confident in our advantaged business model and are progressing with our strategic plans, whilst staying mindful of a challenging sector backdrop and a cautious consumer. We are encouraged by early trading in the second half," it added. It expects pretax profit for the full-year in line with consensus, which it puts at GBP209 million. Wilkinson is to leave the CEO role and retire from full-time executive life, Dunelm said. "The board will commence a formal and thorough recruitment process for Nick's successor, considering both internal and external candidates, and will provide an update in due course. Nick will remain in role until a successor is appointed, continuing to drive business performance and ensuring a smooth and orderly transition, supported by his executive team," it added.
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OTHER COMPANIES
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PZ Cussons reported a swing to profit in a first half that was "in line with expectations". The consumer goods firm behind the Carex brand said pretax profit in the half-year to November 30 amounted to GBP6.4 million, swinging from a loss of GBP94.2 million. Its bottom line in the prior year took a hefty hit from Nigerian naira devaluation. Adjusted pretax profit in the half-year just ended declined 24% to GBP19.8 million from GBP26.1 million. Revenue fell 10% to GBP249.3 million from GBP277.1 million. "Trading has been in line with expectations during the first half of our financial year and, together, three of our priority markets - the UK, Indonesia and ANZ - have delivered solid overall like for like revenue growth of 2%. New product innovation, competitive brand activation and increased retail distribution have combined to deliver the strongest performance in our UK business for three years, thanks in part to particularly successful Christmas sales for Sanctuary Spa gifting. Indonesia recorded a third consecutive quarter of growth and in ANZ our brands have continued to grow share, albeit against a backdrop of market softness," CEO Jonathan Myers said. "Our H1 reported revenue and adjusted operating profit have continued to be impacted by the depreciation of the naira. The more recent stabilisation of the exchange rate and our operational interventions on the ground have, however, enabled us to sustain our trading momentum in the Nigerian market whilst reducing our exposure to further currency depreciation." PZ Cussons maintained its interim dividend of 1.50p per share.
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Heathrow airport said it has recorded the busiest January in its history. More than 6.3 million passengers travelled through the west London airport's four terminals last month. That is up more than 5% from 6.0 million in January 2024. The airport said transatlantic travel was a "key contributor" to the growth. More than 1.2 million passengers travelled between Heathrow and the US in January, up 8% compared with a year earlier. In the wake of Chancellor Rachel Reeves giving her support for a third runway, Heathrow said in a statement the project would require policy changes including on airspace modernisation, planning and the regulatory regime. The statement added that Heathrow is "working with our stakeholders to finalise our plans" and intends to "submit our proposal to government by the summer". Heathrow chief executive Thomas Woldbye said: "2025 has started how we mean to go on – serving record-breaking passenger numbers and delivering trade and investment across the whole of the UK. "To ensure we continue on this upwards trajectory, the government has signalled their support for an expanded Heathrow. "We'll now work with ministers to progress the necessary policy changes required to advance our growth plans."
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By Eric Cunha, Alliance News news editor
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