The London market dropped in the open as profit-taking kicked in. The FTSE 100 has been bouncing within a tight range over the last week, and there isn’t enough good news to launch another attack on the 7100 mark. The weaker-than-expected growth number prompted some buying as there is a diminished chance of an interest rate rise from the Bank of England.
Shares in BP are higher this morning after the oil titan smashed first-quarter profit expectations. The collapse in the price of oil has crippled smaller oil companies but BP’s refinery business is booming, and it is helping to offset the weak profits from the upstream business. BP has significantly cut its capital expenditure for its oil exploration budget, and the company will sit on its hands while the price of oil remains depressed, but that will all change if it moves higher again.
Whitbread CEO Andy Harrison announced he will step down at the end of this year, and he will be finishing on a high note as the share price recently hit a record high. Costa Coffee and Premier Inn both registered doubled-digit annual revenue growth, and the group has high hopes for the brands in terms of forecasts between now and 2020.
Sterling slipped on the back of the disappointing UK GDP reading. The pound has had such a positive run recently, but dealers quickly dumped sterling after the poor growth numbers.
IG is offering a number of political markets on the UK general election, and the binary bet for the election is indicating at 90% chance of no overall majority. The binary market on who will be the next Prime Minister is indicating a 60% chance it will be Ed Miliband.
We are expecting the Dow Jones to open 20 points lower, at 18,017. Apple shares are up nearly 2% in the pre-market after the outstanding first-quarter numbers last night. The expansion in China has proved fruitful for Apple, as Chinese revenue outstripped that of the US.