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FTSE 100 at the close: Rolls-Royce, BP

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By Patrick Munnelly, Market Strategist, Tickmill

The FTSE 100 in the UK had a lacklustre performance on Tuesday heading into month end just above the flatline 0.12%.

While the index remained relatively flat, the energy sector saw a significant sell-off, largely driven by a sharp decline in oil major BP’s shares.

BP posts lower than expected profits

BP LON:BP., the British oil giant, was the biggest loser on the FTSE 100 index, with its shares falling by 4.6%.

The decline came after BP reported quarterly profits of $3.3 billion, which fell short of analysts’ expectations of $4 billion. This performance was attributed to a substantial drop in energy prices compared to the previous year.

Despite the lower-than-expected profits, BP maintained its dividend at 7.27 cents per share and extended a $1.5 billion share buyback program over the next three months.

The company also projected an annual capital expenditure of $16 billion, which is at the lower end of the indicated range of $16 billion to $18 billion.

Additionally, BP anticipated “significantly lower” refining margins in the industry for the fourth quarter.

Prior to this decline, BP’s stock had seen an increase of 11% since the beginning of the year.

Barclays upgrade boosts Rolls-Royce

Rolls-Royce LON:RR., a prominent aerospace engineering company, saw its shares rise by 6.6%, making it the top percentage gainer on London’s FTSE 100 index.

The surge in Rolls-Royce’s stock came after Barclays upgraded the company from “Equal Weight” to “Overweight” and raised its target price to 270 pence from 239 pence.

The upgrade was accompanied by an increase in the earnings forecast for Rolls-Royce for the fiscal years 2024 and 2025. This adjustment was based on strong profit margins within the civil aerospace sector.

As a result of this upgrade, Rolls-Royce’s shares reached their highest point since October 18.

Rolls-Royce shares have seen an impressive 102% increase since the beginning of the year.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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