Having continued to fall early on amid persistent concerns about rising global coronavirus cases, the FTSE 100 turned positive by lunchtime as investors focused their attentions on better-than-expected earnings updates from market bellwethers BP (BP.) and HSBC (HSBA).
Investors were also optimistic that Wall Street would claw back some of Monday’s losses after US stock markets suffered their sharpest drop in weeks over concerns about the economic impact of surging cases.
By 11.41 am, the blue chip benchmark was up 0.18% at 5,802.41.
BP AND HSBC BEAT EXPECTATIONS
In company news, oil major BP added 0.73% to 201.45p after it swung to a modest third-quarter profit, beating market expectations. But in a sign the sector is far from out of the woods, the firm cut its quarterly dividend by 49% to 5.25 cents per share.
BP reported underlying replacement cost profit, its definition of net income, of $86 million in the three months from July to September, down from $2.2 billion a year earlier but a significant improvement on the $6.7 billion loss made in the previous quarter and better than expectations of a $118 million quarterly loss.
Meanwhile HSBC rallied 6.6% to 340.6p, even as it reported a 35% drop in third-quarter profit that nevertheless beat low market expectations.
For the quarter ended 30 September, pre-tax profit fell to $3.1 billion from $4.8 billion year-on-year as revenue, affected by a lower interest rate environment, plunged to $11.9 billion from $13.4 billion.
The bank also said its credit loss charge for the full year was currently trending towards the lower end of its previous $8 billion to $13 billion guidance range.
WHITBREAD SWINGS TO BIG LOSS
Premier Inn hotel chain owner Whitbread (WTB) firmed 19.5p to £22.64 despite swinging to a £725 million first-half loss and scrapping its dividend after the pandemic devastated the hospitality sector.
In an ominous sign, Whitbread said it had seen another slowdown in demand due to recent regional lockdowns and more home-based working.
Budget airline EasyJet (EZJ) edged 0.3% higher to 521p after it sold and leased back a number of its aircraft, raising around £306 million to bolster its balance sheet.
Wealth manager St James’ Place (STJ) shed 0.85% to 921.7p on announcing that funds under management for the third quarter had risen 5.2%.
St James’ Place, which is facing calls from an activist investor to cut costs, said its net inflows during the quarter amounted to £1.44 billion, down from £2.11 billion in the same period last year.
PLUS500 TUMBLES DESPITE DOUBLING EARNINGS
Online contracts-for-difference broker Plus500 (PLUS) tumbled 7.7% to £14.96, even as operating earnings almost doubled in the third quarter as heightened market volatility encouraged more punters to place bets.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months through September jumped 91% to $134.2 million as revenue rose 96% to $216.4 million.
But there was no upgrade for the full year: Plus500 said its annual revenue and earnings were still expected to be in line with current analysts’ consensus forecasts.
Fashion retailer Quiz (QUIZ:AIM) rose 1.25% to 7.29p despite swinging to a £29.4 million loss for the year through March and saying trading had deteriorated even further since due to the pandemic.
Quiz said sales for the six months to 30 September 2020 had tumbled 73% to £17.2 million.
Cocktail bar owner Revolution Bars (RBG:AIM) fell 1.5% to 9.75p after it launched a company voluntary arrangement (CVA) to reduce the size of its estate and rental cost base. Under the CVA, it would exit six bars and obtain materially improved rental terms on seven others.
Revolution Bars also said the latest government restrictions clouded its outlook and that it now expected the important Christmas trading period to be ‘severely compromised’.
