Key Points
- FTSE 100 closing price of 7105, +0.33%
- Earnings help FTSE eke out gains
- Smiths Group tumbles after deal to sell medical division
- GBP higher as Covid cases not rising; BoE in focus
- Oil falls on fears of China slowdown
- Bitcoin lower ahead of Gensler talk
By Samuel Indyk
Investing.com – The FTSE 100 finished higher on Tuesday, closing above 7,100, benefitting from some positive earnings results.
BP (LON:BP) shares helped propel the index higher after the oil major boosted its dividend and share buybacks following a surge in profits. BP CEO Bernard Looney confirmed that if oil averages $60 per barrel then they could increase their dividend 4% annually and buyback $1 billion worth of shares every quarter.
Fresnillo (LON:FRES) shares finished in the green after higher production of silver and gold and increasing metals prices helped the company report a jump in profits. The group also lifted its dividend and said it remains on track to meet its 2021 full year guidance.
Smiths Group (LON:SMIN) was a drag on the FTSE 100 after the company agreed to sell its medical division to US PE firm TA Associates. The deal is valued at $2.3 billion with the London-listed group expecting to receive net cash proceeds of $1.8 billion from the sale.
GBP was relatively strong with GBP/USD trading around 1.39, although ranges were again narrow ahead of the Bank of England’s interest rate decision on Thursday and Friday’s US nonfarm payrolls report.
A steadying of Covid cases despite the easing of restrictions in July has helped the pound recover some lost ground as fears of another surge have dissipated for now. Some epidemiologists had been calling for 100,000 cases per day but the average number of daily cases over the last seen days stands at just 26,104.
Although UK cases are falling, news that the Delta variant has reached China has weighed on oil prices. China has introduced a number of restrictions in various provinces as cases have increased, promoting some analysts to predict a fall in oil demand from the world’s second largest oil consumer.
Reports that an oil or chemical tanker hit a naval mine in the Gulf of Oman did little to lift prices, but the latest maritime incident follows news that an Israeli-owned ship as attacked off Oman last week.
Bitcoin and other major cryptocurrencies continued to drift lower following the gains last week, with Bitcoin briefly dropping back below $38,000. Focus is on a panel discussion with SEC Chair Gary Gensler, who is sitting down to discuss the cryptocurrency space and national security with Wall Street Journal reporter Paul Vigna at 17:15BST.
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