London midday: FTSE edges up as BP, Shell gush higher

(Sharecast News) - London stocks were a little firmer by midday on Monday as investors looked ahead to a busy week for earnings and central bank announcements, with strong performances from BP and Shell lending a hand.

The FTSE 100 was 0.2% higher at 7,650.92.

Russ Mould, investment director at AJ Bell, said: "Oil prices advanced thanks to a renewed escalation in Middle East tensions, with a further attack on shipping in the Red Sea by Houthi rebels and three US soldiers killed in a drone attack on a US service base on the border of Jordan and Syria.

"Crude hitting its highest level since November feels ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut. Geopolitical factors seem to be propping up oil at a time when the wider dynamics of supply and demand look less than favourable for the energy market.

"Investors may keep their powder dry as they await crunch central bank meetings in the US and UK on Wednesday and Thursday this week. These could dictate market sentiment heading into the spring."

Investors were also looking ahead to a raft of corporate updates on both sides of the pond, with Microsoft, Alphabet, Apple, Meta, Amazon, Diageo, Shell, BT and GlaxoSmithKline all in the frame.

In equity markets, BP and Shell gushed higher in tandem with oil prices, amid escalating tensions in the Middle East.

Ryanair was in focus as it cut its full-year profit forecast and posted a 93% decline in third-quarter net profit, as higher fuel costs offset revenue gains and after its flights were removed from online travel agents.

Net profit fell to €15m from €211m in the same period a year earlier. Ryanair said traffic rose 7% during the quarter to 41.4m and average fares grew 13% to over €42, but the fuel bill was 35% higher at €1.2bn.

Ryanair now expects FY24 profit after tax of between €1.85bn and €1.95bn, down from previous guidance of €1.85bn to €2.05bn.

Superdry rallied as it said it working with advisers on cost-saving options.

Responding to press speculation, the fashion brand said: "In line with the company's turnaround strategy, the company confirms it is working with advisors to explore the feasibility of various material cost saving options.

"Whilst there is no certainty that any of these options are progressed, they aim to build on the success of the cost saving initiatives carried out by the company to date and position the business for long-term success."

Sky News reported over the weekend that Superdry and its advisers at PricewaterhouseCoopers were initiating work on plans that could lead to a company voluntary arrangement (CVA) or restructuring plan. Sky said this could be aimed at closing underperforming shops - with a commensurate impact on jobs - and forcing through rent cuts with landlords.

Iron ore pellet producer Ferrexpo slumped as it said Ukraine's court of appeal has confirmed a claim against it for around $125m as part of the long-running court case against its largest shareholder. The company said it would file an appeal to the Supreme Court in Ukraine.

B&Q and Castorama owner Kingfisher was knocked lower by a downgrade to 'sector perform' from 'outperform' at RBC Capital Markets. RBC said it was relatively cautious on the outlook for France and consensus earnings in the near term, and that it currently sees more valuation upside potential for some other UK retailers such as B&M.

In other broker note action, Schroders fell after a downgrade to 'underperform' at BNPP Exane, while Intertek was higher on the back of an upgrade to 'buy' at Jefferies.

Market Movers

FTSE 100 (UKX) 7,650.92 0.21% FTSE 250 (MCX) 19,262.83 -0.39% techMARK (TASX) 4,368.01 -0.45%

FTSE 100 - Risers

Fresnillo (FRES) 521.80p 4.61% BP (BP.) 471.00p 2.01% British American Tobacco (BATS) 2,378.50p 1.95% BAE Systems (BA.) 1,190.50p 1.93% Shell (SHEL) 2,464.50p 1.44% WPP (WPP) 778.00p 1.22% Haleon (HLN) 321.60p 1.20% Intertek Group (ITRK) 4,509.00p 1.14% GSK (GSK) 1,549.20p 0.79% Melrose Industries (MRO) 585.80p 0.76%

FTSE 100 - Fallers

Schroders (SDR) 408.00p -4.00% Ocado Group (OCDO) 553.00p -3.96% St James's Place (STJ) 651.40p -2.89% Airtel Africa (AAF) 122.10p -2.63% Prudential (PRU) 838.00p -2.35% Halma (HLMA) 2,147.00p -2.19% Mondi (MNDI) 1,463.00p -1.95% SSE (SSE) 1,665.00p -1.94% Intermediate Capital Group (ICP) 1,780.50p -1.90% Phoenix Group Holdings (PHNX) 512.20p -1.84%

FTSE 250 - Risers

Hochschild Mining (HOC) 102.40p 5.40% Investec (INVP) 525.40p 2.86% Ithaca Energy (ITH) 145.90p 2.31% Energean (ENOG) 985.00p 2.18% Elementis (ELM) 144.40p 2.12% FirstGroup (FGP) 172.50p 2.07% easyJet (EZJ) 539.60p 2.04% Trainline (TRN) 322.40p 2.03% Harbour Energy (HBR) 303.50p 1.81% Wood Group (John) (WG.) 173.50p 1.64%

FTSE 250 - Fallers

NCC Group (NCC) 120.40p -4.44% Dr. Martens (DOCS) 84.10p -4.43% Close Brothers Group (CBG) 539.00p -3.92% Helios Towers (HTWS) 81.35p -3.73% Watches of Switzerland Group (WOSG) 375.20p -3.50% Aston Martin Lagonda Global Holdings (AML) 183.50p -3.42% Abrdn (ABDN) 169.40p -3.39% Ferrexpo (FXPO) 83.00p -3.32% Telecom Plus (TEP) 1,486.00p -3.26% ITV (ITV) 59.82p -3.14%