The FTSE 100 rose 0.35% to 7,106 on Tuesday morning, led by BP swinging back into profit for its half year.
“While there was the long-awaited news of a share buyback, confirmed at $1.4 billion, some investors may be disappointed at the paltry rise in the dividend. BP nudged up the shareholder payout by 4%, which pales in comparison to Royal Dutch Shell’s 40% increase declared last month,” said Russ Mould, investment director at AJ Bell.
The major market news of the day so far, however, comes from China. Fears of regulatory interference from the Chinese government aren’t going anywhere, as Tencent becomes the latest stock to fall.
“Talk that gaming will be the next sector to come under pressure from the authorities in China saw Tencent’s shares fall more than 10% at one point on Tuesday. They are now down by more than a fifth year to date as investors reassess their willingness to have exposure to big Chinese names,” according to Russ Mould.
“This is turning out to be one of the big stories of 2021 for global markets, overshadowing what many people thought would the key focal point for Asia – namely a year of strong economic growth.”
FTSE 100 Top Movers
BP (3.55%), Fresnillo (2.89%) and Sainsbury (1.91%) are the three top risers on the FTSE 100 so far today.
At the other end, Smiths Group (-7.73%), Melrose Industries (-2.61%) and Weir Group (-2.09%) make up the bottom three on the UK index.
BP
BP raised its dividend and committed to buying back shares after its Q2 profit surpassed expectations as oil prices rose and demand recovered.
BP will give shareholders $1.4bn (£1bn) through share buybacks, while it will increase its dividend by 4% a year up to 2025.
The FTSE 100 company is expecting a spike in near-term oil prices, in addition to a dramatic shift to low-carbon energy production.
BP made an underlying profit of $2.8bn for the quarter to June, a sharp increase from a loss of $6.68bn year-on-year, as the pandemic brought the oil industry to its knees.