BP profits come in better-than-expected, income rises and bad debts fall for Standard Chartered

London open

The FTSE 100 is expected to open 20 points lower on Tuesday. Having closed up 0.71% at 7,288.62 on Monday.

Stocks to watch

Surging oil and gas prices helped energy giant BP report better-than-expected third quarter profits on Tuesday as demand for its products soared on the back of economic recovery from the Covid pandemic. Underlying replacement cost profit came in at $3.32bn, beating forecasts of $3.06bn and compared with a $2.8bn profit in the previous three months and $86m a year ago. The dividend was maintained at 5.46 cents a share.

Standard Chartered's underlying pre tax profit rose 44% to $1.08bn in the third quarter as income rose and bad debts fell sharply. Underlying operating income increased 7% to $3.77bn in the three months to the end of September. Underlying credit impairments fell 70% to $108m. The bank said it expected annual income to be similar to the year before on a constant currency basis but to be lower in the fourth quarter than in the third. Statutory pretax profit more than doubled to $996m from $435m.

Hiscox reported group gross written premiums growth of 6.1% for its first nine months on Tuesday, to $3.46bn, as strong rate momentum continued across its business segments. The FTSE 250 specialist insurer said Hiscox Retail gross written premiums was up 5.9%, or 1.4% at constant currency, adding that within that there was continued growth in the digital partnerships and direct business, with gross written premiums there up 19.3%, or 15.8% at constant exchange rates. It said its retail combined ratio was progressing in line with expectations.

Newspaper round-up

French Connection shareholders have backed the £29m takeover of the fashion brand led by a Newcastle-based businessman, putting the company back into private hands for the first time since 1983. The new owners are expected to take over on 8 November. The 75-year-old chair and chief executive, Stephen Marks, who co-founded the chain in 1972 and owns nearly 42% of the company, is to receive about £12m for his stake in the business. - Guardian

The engine maker Rolls-Royce has entered into a long-term partnership with the Gulf state of Qatar to invest billions in green engineering projects to fund entrepreneurs finding new ways to help transition to net zero. The deal will include the creation of about 1,000 jobs at two campuses – one in northern England and one in Qatar – where climate technology businesses will be created, launched and developed. - Guardian

Partners at EY were handed record pay of nearly £750,000 in the year to July as the accountant shrugged off Covid and was boosted by a shift to home working. The firm handed an average £749,000 in shared profits to its most senior UK staff in the 12 months, up 12pc on the previous year. - Telegraph

Funds managed by one of the world’s biggest investment institutions are preparing to sell a block of shares in THG as the ecommerce group struggles to allay investors’ concerns over its business model. Shares in the Manchester-based group have fallen sharply over the past two months amid corporate governance concerns and questions surrounding the true value of its Ingenuity technology platform. That included a 35 per cent drop as its management tried to allay fears via a capital markets day. - The Times

Ministers have been accused of failing to get a grip on the impact of the cladding crisis after it emerged that the fiscal watchdog did not consider the cost of repairs in its forecast of residential investment in Britain. Sir Charlie Bean, a member of the budget responsibility committee, told MPs that the Office for Budget Responsibility’s economic forecasts, published alongside the budget last week, had not factored in the impact of costs to remove dangerous cladding. - The Times

US close

Wall Street stocks closed in positive territory on Monday, as a week headlined by corporate earnings and the Federal Reserve's two-day policy meeting started off with both the ISM and IHS Markit's manufacturing PMIs.

At the close, the Dow Jones Industrial Average was up 0.26% at 35,913.84, the S&P 500 added 0.18% to 4,613.67, and the Nasdaq Composite was ahead 0.63% at 15,595.92.

The Dow closed 94.28 points higher on Monday after all three major averages saw out the previous session at fresh record highs.

On the macro front, IHS Markit's manufacturing purchasing managers index expanded at a slightly slower pace in October, with the PMI dropping from 60.7 in September to 58.4 last month, short of a flash estimate of 59.2.

“October saw US manufacturers report yet another near-record lengthening of supply chains, with shortages of components constraining production growth to the lowest since July of last year,” said Chris Williamson, chief business economist at IHS Markit.