London pre-open: Stocks to rise amid raft of earnings; BP, HSBC in focus

(Sharecast News) - London stocks were set to gain at the open on Tuesday following a solid session on Wall Street, as investors continued to mull the latest developments in the US-Iran conflict and amid earnings from the likes of HSBC and BP.

The FTSE 100 was called to open around 28 points higher. At 0725 BST, Brent crude was up 1.2% at $84.76 a barrel and West Texas Intermediate was 0.6% higher at $80.85, having tumbled on Monday.

Danske Bank said the move in oil markets "came amid conflicting headlines on whether US-Iran talks have resumed and US President Trump calling his latest offer of talks a 'final chance' for Iran".

In corporate news, HSBC posted a better-than-expected 23% jump in first-half profit driven by a strong second quarter on the back of net interest income and fees.

Pre-tax profit rose to $19.5bn, compared with the $18.9bn average forecast by analysts in a company-compiled consensus. The bank said it was resuming share buybacks with a $1bn repurchase plan.

BP said underlying profits more than doubled and operating cash flow soared in the second quarter as oil prices surged, but acknowledged that its operational performance "fell short" of expectations, with upstream plant reliability and refining throughput both lower.

The energy major reported an underlying replacement cost profit of $5.73bn for the three months to 30 June, up from $3.20bn in the first quarter and $2.35bn the year before. The company also announced its intention to sell its US biogas business Archaea as it continues to pivot out of renewables.

Medical equipment manufacturer Smith & Nephew posted improved firsthalf revenue and operating profits but trimmed its fullyear revenue growth outlook, saying it now expects around 4% growth rather than the 6% previously guided.

Smith & Nephew delivered H1 revenue of $3.10bn, up 4.6% on a reported basis and 2.3% underlying, while operating profits rose 4.3% to $448m and trading profits increased 8.1% to $566m, lifting the firm's trading margin 60bps to 18.3%.

Elsewhere, Segro said it has agreed to be taken over by US logistics giant Prologis in a �14.3bn deal.

Chief executive David Sleath said: "Prologis shares our conviction in the long-term structural drivers underpinning demand for modern logistics and data centre infrastructure.

"We believe the combination would bring together two highly complementary businesses and create a compelling platform, combining Segro's exceptional portfolio and development pipeline with Prologis' existing European business and global scale, customer franchise and operational capabilities, while retaining a shared commitment to disciplined capital allocation, customers and people."