Spreadex Market Update
BP beats estimates but can’t lift UK commodity sector
The UK’s third quarter GDP is the focus this morning, with the expected fall to 0.6% (or, as some more pessimistic analysts have forecast, 0.5%) from the 0.7% growth in Q1 and Q2 explaining the FTSE’s sluggish start to the day. Of course the UK index’s nascent losses were exacerbated by another weak open from its commodity stocks, leaving the FTSE with around a 25 point drop as the day got underway.
Interestingly, however, the company that had the biggest reason to fall managed to escape the sector-wide slide after the bell; a better than expected 40% plunge in profits to $1.8 billion against the $1.2 billion forecast, and an announcement of further capex cuts (from a previously expected $24-26 billion to $17-19 billion a year until 2017) that was hardly a surprise, prevented BP from sinking into the gutter alongside its commodity peers. Granted, its gains quickly fell from their peak as the dust settled on the open, but even its shrinking growth put BP ahead of the commodities pack this Tuesday morning.
With the UK hogging the limelight figures- and earnings-wise, investors had little reason to prevent the European indices from sliding into the red after the bell. The DAX dipped by 60 points, taking it a smidgen away from its recent highs, whilst the CAC saw its own 25 point drop.
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