London midday: BP paces the gains as investors eye Powell speech

London midday: BP paces the gains as investors eye Powell speech

Sharecast - The FTSE 100 was 0.6% firmer at 7,882.01.

Powell is due to speak later in the day at the Economic Club of Washington.

Lukman Otunuga, senior research analyst at FXTM, said: "After last week’s freakishly strong US jobs data, market expectations around the Fed switching to rates cuts later in 2023 have taken a massive hit. The robust strength of the US labour force is expected to fuel fears over inflation remaining stubbornly high, ultimately empowering the Fed hawks.

"Given the latest developments, much attention will be directed on Powell’s tone, messaging and whether fresh insight is offered over monetary policy for 2023, especially after the market’s dovish reaction to his recent FOMC press conference. Should the central bank head signal that rate cut bets were misplaced, this could boost dollar bulls along with Treasury yields."

On home shores, investors digested industry data showing that UK retail sales growth slowed last month as the festive boost faded.

According to the latest BRC-KPMG Retail Sales Monitor, total sales rose 4.2% year-on-year in January, or by 3.9% on a like-for-like basis.

It was a marked slowdown on January 2022, when retail sales strengthened 11.9% on both a total and like-for-like sales basis. It was also down on December, when total sales rose 6.9% and underlying sales by 6.5%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "As Christmas cheer subsided, retailers felt the January blues as sales growth slowed.

"Many retailers discounted heavily to entice consumer spend, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes.

"The coming months will continue to be challenging for retailers and their customers. Consumer confidence remains stubbornly low and looming rises in household bills and mortgages mean discretionary spending will remain weak."

Market participants were also mulling over the latest survey from mortgage lender Halifax, which showed that house prices stabilised in January following four months of falls.

Prices were broadly flat on the month at £281,684, following a 1.3% decline in December and a 2.4% drop in November. On the year, price growth slowed to 1.9% from 2.1% in December and 4.6% in November.

The average house price is now around £12,500, or 4.2%, below its peak in August last year, but around £5,000 higher than in January 2022.

In equity markets, BP (LON:BP) surged to the top of the FTSE 100 after saying it more than doubled annual profits to a record $27.6bn as it cashed in on soaring gas prices. This fuelled more calls for the government to change windfall tax arrangements on energy companies as consumers face a 40% rise in household bills in April.

The full-year result compares with $12.8bn a year earlier. In the final three months of 2022 underlying replacement cost profit - its preferred measure - came in at $4.80bn, missing estimates of $5.04bn and well below $8.15bn in the third quarter.

BP's results follow those from rival Shell (LON:RDSa), which last week posted record yearly profits of almost $40bn as gas prices took off as Russia invaded Ukraine. Shell also rallied.

Auction Technology gained after it announced the acquisition of US estate sales listing site Vintage Software for $40m.

On the downside, Morgan Advanced Materials slumped as it warned that disruption from a previously-disclosed cyber incident meant that FY2023 adjusted operating profit was likely to be 10-15% lower than expected.

Ferrexpo (LON:FXPO) was also weaker after the iron ore pellet maker said Ukrainian courts have granted an order to freeze bank accounts belonging to one of its subsidiaries in the war-torn country over alleged royalty underpayments.

Market Movers

FTSE 100 (UKX) 7,882.01 0.58%

FTSE 250 (MCX) 20,311.15 -0.48%

techMARK (TASX) 4,532.28 0.15%

FTSE 100 - Risers

BP (BP.) 504.80p 5.53%

Shell (SHEL) 2,449.00p 2.11%

GSK (GSK) 1,490.20p 2.00%

Airtel Africa (AAF) 119.50p 1.79%

Barclays (LON:BARC) 189.40p 1.53%

BT Group (LON:BT.A) 132.30p 1.50%

HSBC Holdings (LON:HSBA) 604.20p 1.38%

Anglo American (LON:AAL) 3,393.50p 1.24%

Lloyds Banking Group (LON:LLOY) 53.46p 1.19%

Glencore (LON:GLEN) 551.70p 1.06%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 177.25p -2.69%

Hargreaves Lansdown (LON:HRGV) (HL.) 905.60p -1.39%

St James's Place (STJ) 1,243.50p -1.31%

SEGRO (SGRO) 857.00p -1.15%

Coca-Cola (NYSE:KO) HBC AG (CDI) (CCH) 1,943.00p -1.09%

Unite Group (LON:UTG) 1,012.00p -1.08%

Croda International (CRDA) 7,086.00p -1.06%

Abrdn (ABDN) 210.20p -1.04%

Diageo (LON:DGE) 3,525.50p -1.01%

Sage Group (LON:SGE) 786.60p -1.01%

FTSE 250 - Risers

Auction Technology Group (ATG) 737.00p 7.91%

Wood Group (John) (WG.) 143.50p 2.68%

Darktrace (LON:DARK) 238.00p 2.59%

W.A.G Payment Solutions (WPS) 82.00p 2.50%

Tullow Oil (LON:TLW) 34.76p 2.36%

FirstGroup (FGP (LON:FGP)) 110.80p 2.12%

Bank of Georgia Group (BGEO) 2,740.00p 1.48%

Balanced Commercial Property Trust Limited (BCPT) 81.90p 1.36%

Dechra Pharmaceuticals (LON:DPH) 3,178.00p 1.34%

Alliance Trust (LON:ATST) 1,040.00p 1.17%

FTSE 250 - Fallers

Morgan Advanced Materials (MGAM) 300.50p -4.91%

Mitie Group (LON:MTO) 79.60p -4.56%

Bakkavor Group (BAKK) 114.60p -3.70%

Currys (CURY) 74.40p -3.00%

Supermarket Income Reit (SUPR) 98.60p -2.86%

FDM Group (Holdings) (FDM) 820.00p -2.84%

Ferrexpo (FXPO) 148.20p -2.82%

Syncona Limited NPV (SYNC) 175.20p -2.67%

Tritax Big Box Reit (BBOX) 155.60p -2.63%

Plus500 (LON:PLUSP) Ltd (DI) (PLUS) 1,902.00p -2.51%

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