London stocks closed in the green on Wednesday, boosted by gains in the banking sector, despite investors’ disappointment as BP announced a reduced buyback programme.
The FTSE 100 index closed up 62.79 points, 0.7%, at 8,731.46. The FTSE 250 ended up 147.62 points, 0.7%, at 20,595.90, while the AIM All-Share closed up 3.44 points, 0.5%, at 711.50.
The Cboe UK 100 ended up 0.9% at 874.86, the Cboe UK 250 closed up 0.7% at 17,934.05, while the Cboe Small Companies fell 0.6% at 15,769.95.
In European equities on Wednesday, the CAC 40 in Paris ended up 1.0%, while the DAX 40 in Frankfurt soared 1.7%.
US financial markets were higher at the time of the London close. The DJIA was up 0.3%, the S&P 500 was 0.7% higher, and the Nasdaq Composite advanced 1.1%.
Attention across the pond is squarely on fourth quarter earnings from chip maker Nvidia.
‘Such is its weighting and its importance to the all-pervasive AI theme, the results could have a significant impact on market sentiment,’ said AJ Bell’s Russ Mould.
Investors also weighed latest developments on tariffs.
Donald Trump ordered an investigation Tuesday into possible levies on US copper imports, with officials citing a need to rebuild domestic production and safeguard national security – the latest salvo of the president’s tariff threats.
The imposition of tariffs or other barriers on copper could fuel trade tensions with Chile, the biggest US supplier accounting for about 35% of imports, as well as Canada.
The news boosted shares in miner Antofagasta, up 3.6%.
The pound was quoted at $1.2692 at the London equities close Wednesday, higher than $1.2653 at the close on Tuesday. The euro rose to $1.0509 against $1.0501.
Against the yen, the dollar was trading lower at JP¥149.25 compared with JP¥148.84 late Tuesday.
Back in London and BP announced its eagerly awaited strategic reset, stating it will slash renewable spending, and up oil and gas investment.
The London-based oil major also expects to announce a $750 million to $1.0 billion share buyback in its first-quarter results, which would be down from the $1.75 billion announced in its annual numbers earlier this month.
BP said it plans to increase oil & gas investment to around $10 billion per year, though ‘transition investment’ will be around $1.5 billion to $2 billion, which the firm explained would be over $5 billion lower than previous guidance.
The update received an underwhelming reaction, with shares marked down 1.9% in London.
Chief Executive Officer Murray Auchincloss said: ‘This is a reset BP, with an unwavering focus on growing long-term shareholder value.’
Biraj Borkhataria at RBC Capital Markets felt the ‘less material’ capex cut might disappoint some in the market.
‘Given BP had left a number of breadcrumbs for investors over recent months on the strategy change, the updated guidance directionally all looks in line with expectations, however we think the capex cut was less material than many investors were suggesting to us, while in the near term, shareholder returns for BP are now lower than peers. To us, much of the release looks to be BP making the right calls for the long term, but it may not please investors today.’
He said, based on experiences from peers, a ‘fundamental reset’, can take some time to come through in the numbers. ‘We continue to see better risk-reward elsewhere in the sector,’ he added.
Faring better, Lloyds Banking Group rose 3.9%, hitting a seven-year high and extending a buoyant run since releasing full-year results.
Deutsche Bank increased its share price target to 88 pence from 80p and reiterated a ’buy’ rating.
‘Very few European banks offer the same enviable combination of strong revenue; tangible net asset value; dividend and buyback growth that Lloyds has to offer,’ analyst Robert Noble said in a research note.
By 2027, Noble expects capital return per share to be almost double the 2024 reported level.
Barclays also rose 3.2%, while Standard Chartered rose 4.0%. Insurer Aviva was in demand, up 3.3% ahead of full-year results on Thursday.
Also on the FTSE 100 ConvaTec gained 4.9%, after the company reported a sharp increase in annual profit, supported by steady revenue growth. The medical products firm also lifted its full-year dividend and reaffirmed its outlook, citing confidence in its expanding product pipeline.
But Hikma Pharmaceuticals slid 6.2% after strong looking results.
The London-based pharmaceutical maker with operations in Jordan said pretax profit jumped 62% to $455 million in 2024 from $281 million in 2023, mainly reflecting an impairment reversal in its Generics business.
Core operating profit climbed a more modest 1.7% to $719 million in 2024 from $707 million, in line with consensus, at a margin of 22.8% which fell from 24.6% in 2023.
Revenue increased 8.7% to $3.13 billion in 2024 from $2.88 billion a year prior, while core revenue rose 10% to $3.16 billion from $2.88 billion, 3% ahead of consensus.
Analysts at Panmure Liberum said: ‘The shares have had a strong run up more than 15% year-to-date so we expect today’s in line statement will probably trigger a pause for breath.’
The firm also pledged to increase investment in research and development spending by 20% in 2025 to support the development of its global pipeline.
Gold was quoted higher at $2,912.10 an ounce at the London equities close on Wednesday against $2,895.74 at the close on Tuesday.
Brent oil was quoted at $72.83 a barrel at on Wednesday, down slightly from $72.86 late Tuesday.
Thursday’s UK corporate calendar has results from engine maker Rolls-Royce, exchange operator London Stock Exchange Group, toothpaste and painkiller group Haleon, advertising group WPP, insurer Aviva and housebuilder Taylor Wimpey.
Thursday’s global economic calendar has US weekly jobless claims data, durable goods orders figures and quarterly GDP and PCE prints.
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