BP swings to second quarter profit, Standard Chartered resumes dividends

London open

The FTSE 100 is expected to open three points lower on Tuesday, having closed up 0.7% at 7,081.72 on Monday.

Stocks to watch

BP said it expected to buy back about $1bn of shares each quarter and increase its dividend over the next five years as the oil company swung to a second-quarter profit. Underlying replacement cost profit was $2.8bn in the three months to the end of June compared with a $6.7bn loss a year earlier after oil prices rebounded. BP increased its second-quarter dividend to 5.46p a share from 5.25p a year earlier and said it would buy back $1.4bn of shares from first-half cash flow. BP said if oil prices average $60 per barrel it expected to buy back about $1bn of shares per quarter and to have capacity for a 4% dividend increase through 2025.

Standard Chartered reported a rise in first-half profits and said it was resuming dividends against an improving economic backdrop. The bank made pre-tax profits of $1.15bn in the second quarter, up 55% year on year and beating consensus analyst estimates of $1.1bn. For the first half of the year, Standard Chartered reported pre-tax profits of $2.56bn, a 57% jump from the same period in 2020. It also announced a $250m share buyback and said it would pay an interim dividend of 3 cents per share.

Domino’s Pizza Group reported “strong” performance in the UK and Ireland in its first half on Tuesday, with system sales of £752.3m, up 19.6%, and like-for-like system sales excluding splits up 19.3%, aided by the reduced rate of VAT. The FTSE 250 company said underlying profit before tax totalled £60.8m in the 26 weeks ended 27 June, up 27.7%, driven by the strength of the core business and lower Covid-19 related costs. Its statutory profit after tax was £41.3m, up from £19.0m, benefitting from the successful disposal of all but one of its loss-making international operations.

Newspaper round-up

Gaps on supermarket shelves are likely to continue for several months unless the government does more to tackle the labour crisis hitting haulage firms, suppliers have warned. Logistics and hauliers’ organisations said August would be a pinch point in the shortage as workers take summer breaks, while firms offering bonuses and sign-on fees to recruit drivers were not helping matters. - Guardian

The ending of the government’s furlough scheme will lengthen dole queues by 150,000 despite a boost to activity from the ending of lockdown that will make the UK the fastest-growing G7 nation this year, a leading think tank has said. In its quarterly update on the UK, the National Institute of Economic and Social Research (Niesr) said it had revised up its 2021 growth forecast from 5.7% to 6.8%. - Guardian

Reese Witherspoon has sold a majority stake in her female-focused production company in a deal that values the venture at about $900m (£650m). Hello Sunshine, which produced the HBO drama Big Little Lies and The Morning Show for Apple TV+, was founded by the actress in 2016 to produce television series centred on female leads. - Telegraph

The communities secretary is facing renewed calls from commercial tenants to force landlords to waive at least 50 percent of rent debts built up during the pandemic. The Commercial Tenants Association, which represents 500 businesses ranging from insurers to retailers, has written to Robert Jenrick proposing that the government adopt an Australia-style model to address the billions of pounds in rent debts. - The Times

The economy will grow faster than initially expected this year and policymakers should make it clear that they are ready to curb rising inflation, a leading think tank has said. In its latest forecasts, the National Institute of Economic and Social Research said that the economy would expand by 6.8 per cent this year, up 1.1 percentage points from its May report, even though the spread of the Delta variant of coronavirus has created new uncertainty. - The Times

US close

Wall Street stocks closed in a mixed state on Monday, as market participants made it through the first trading day of August.

At the close, the Dow Jones Industrial Average was down 0.28% at 34,838.16 and the S&P 500 lost 0.18% to 4,387.16, while the Nasdaq Composite managed gains of 0.06% to 14,681.07.

The Dow closed 97.31 points lower on Monday, adding to losses recorded in the final session of an otherwise strong month for major indices in July.

Concerns regarding the delta variant of Covid-19 were still lingering on Monday, even though investors placed their bets on reopening plays like Carnival and US airlines earlier in the session.

On the macro front, IHS Markit's manufacturing PMI reached a new series high of 63.4 in July, up from flash estimates for a print of 63.1, with both manufacturers and suppliers once again struggling to meet booming demand.