The FTSE 100 index early Tuesday was being supported by its two big oil producers, BP and Shell, as the London market returned from a long holiday weekend to crude prices back above $100 a barrel.
The FTSE 100 index was up 43.63 points, or 0.6%, at 7,470.94 early Tuesday. The mid-cap FTSE 250 index was up 42.99 points, or 0.2%, at 19,212.71. The AIM All-Share index was up 0.52 points, or 0.1%, at 897.30.
The Cboe UK 100 index was up 0.8% at 747.04. The Cboe 250 was up 0.4% at 747.04 and the Cboe Small Companies flat at 14017.94.
In mainland Europe, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.5% early Tuesday.
Brent oil was trading at $104.31 a barrel early Tuesday, up from $99.59 late Friday.
Shares in Shell were up 2.2%, while peer BP was up 2.1%.
They were helping to offset losses for Bunzl, down 3.3% in opening trade. Shares in the London-based distribution firm fell despite it raising its full-year margin outlook.
Revenue for the first half of 2022 rose 16% to £5.65 billion from £4.87 billion a year before. Revenue was driven by product cost inflation and continued volume recovery in the base business, and growth from acquisitions.
‘The base business saw very strong revenue growth across North America, Continental Europe and UK & Ireland, driven by strong product cost inflation. This was complemented by volume recovery in Continental Europe and UK & Ireland, due to the reduced level of Covid-19 related restrictions compared to the prior year,’ Bunzl said.
Pretax profit improved 7.6% to £296.6 million from £275.7 million.
Bunzl said inflation was ‘somewhat supportive’ to margins, though the reduction of Covid-19 sales meant they still narrowed to 7.3% from 7.5%. Still, Bunzl now expects its full-year operating margin to be higher than historical levels and only slightly below 2021.
Shore Capital said investors are likely to focus on the impact of inflation, energy costs and logistics on Bunzl’s margins. However, overall, the broker saw the announcement as an ‘excellent set of results...on first look through’.
On AIM, Joules shares slumped 8.6% as the retailer insisted it continues in ‘positive’ discussions with Next over a possible investment, despite Sky News over the weekend reporting that talks had stalled.
Sky News said it has learnt the two companies are not close to agreeing the terms of an investment from Next, and the FTSE 100-listed retailer had not received enough financial information to allow it to make a formal offer to the Joules board.
There were also doubts that Next would want to proceed with a deal at 33p per share or more given Joules shares closed at 25.5p on Friday. The stock has fallen 82% since the start of 2022, and shares had closed at 33p the day before the companies confirmed they were in talks over the potential equity investment.
The move, if it goes ahead, will see Next inject about £15 million into Joules, the AIM-listed company said earlier in August, noting the price will be ‘at no less than Joules’ current market price’.
Joules on Monday said: ‘There can be no certainty that these discussions will lead to any agreement, and further announcements in this regard will be made if and when appropriate.’
Shares in Next were up 1.7%.
Sterling was quoted at $1.1713 early Tuesday, lower than $1.1764 at the London equities close on Friday.
The euro traded at $0.9996 early Tuesday, flat against $0.9997 late Friday. The single currency was finding some support after the European Central Bank’s chief economist said it should continue to raise interest rates at a ‘steady pace’.
Lifting interest rates in increments that were ‘neither too slow nor too fast’ was important due to the ‘high uncertainty’ around future inflation, as the war in Ukraine and rocketing energy prices shake the eurozone, ECB Chief Economist Philip Lane said in a speech in Barcelona.
Influential ECB board member Isabel Schnabel called for policymakers to show ‘determination’ in the fight against inflation in a speech at the annual central banking symposium in Jackson Hole last week.
Against the yen, the dollar was quoted at JP¥138.58, up from JP¥137.31.
In Asia on Tuesday, the Japanese Nikkei 225 index closed up 1.1%. In China, the Shanghai Composite ended down 0.4%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney closed up 0.5%.
Gold was quoted at $1,733.41 an ounce early Tuesday, lower than $1,736.54 on Friday.
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