London stock market rises on strong corporate results

The logo of BP is seen at a petrol station in Kloten, Switzerland. Shares in the British energy major ended with a gain of 1.8% at 547.70 pence in afternoon deals yesterday in London after the company said first-quarter net profits soared 70% on rising crude oil prices and increasing output

Wall Street dropped yesterday, extending the previous session’s losses, while London and Tokyo rose in quiet trading as most world indices were closed due to public holidays around the globe.US stocks sagged ahead of Apple earnings and a Federal Reserve meeting that will update the central bank’s views on the speed of planned interest rate hikes. Wall Street had ended lower Monday on worries about US policies on Iran and trade. Yesterday in London, investors reacted to data showing that Britain’s manufacturing sector dropped to a 17-month low point in April.

The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 53.9, down on March’s level of 54.9. The data weighed on sterling, as prospects for a May interest rate hike from the bank of England receded further, analysts said. The pound’s weakness though provided support to London’s benchmark FTSE 100 index which ended up 0.2% at 7,520.36, owing to the fact that it includes a number of heavyweight companies earning in dollars. “The pound’s losses accelerated after the US open, the bottom completely falling out of the currency as it not only dealt with the latest dovish data from the UK, but the dollar’s own growing confidence,” said Connor Campbell, analyst at traders Spreadex.

Earlier yesterday, Tokyo’s Nikkei closed higher in quiet trade during Japan’s golden Week holiday period, as investors took to the sidelines ahead of key earnings and economic data in the United States. Elsewhere, oil prices slid as investors kept watch on developments in the Middle East. Crude futures had earlier risen in Asian trading hours after Israeli Prime Minister Benjamin Netanyahu said he had fresh evidence that Iran is continuing with a nuclear weapons programme. Netanyahu’s presentation “underlines the importance” of the controls imposed on Tehran in the 2015 deal, British Foreign Secretary Boris Johnson said yesterday.

With US President Donald Trump weighing up whether to stay in the deal, Johnson insisted that the agreement was not “based on trust about Iran’s intentions” – the core of Netanyahu’s claims – “rather it is based on tough verification” by the International Atomic Energy Agency. In company activity yesterday, Apple shares gained 0.9% ahead of its earnings, which will be released after the stock market closes.  Some analysts expect disappointing iPhone sales to be offset by new announcements on shareholder buybacks or dividends.

Sony shares earlier tumbled 6% after the electronics giant reported profits worth $4.5bn but forecast a moderate slowdown. BP ended with a gain of 1.8% at 547.70 pence in London afternoon deals after the British energy major said first-quarter net profits soared 70% on rising crude oil prices and increasing output. “BP shares hit their highest level in eight years after the company posted first-quarter profits which topped analysts’ estimates,” noted David Madden, analyst at CMC markets UK.

Sources and photo-credits: Gulf Times