Not much seemed to be stirring on Christmas Eve on the UK stock market as the FTSE 100 drifted a little lower.
Weakness in the dollar, expectations for further US rate cuts, concerns about government deficits and debt in the developed world and geopolitical tensions have all been combining to put precious metals on a pedestal.
However, having hit record levels overnight there were signs of a modest pullback this morning after stronger-than-anticipated data on the US economy. GDP coming in materially ahead of forecasts also helped to propel the S&P 500 to its own all-time highs but has reduced expectations for a near-term cut to US interest rates, which in turn led to mixed trading in Asia.
BP
Shareholders in BP got an early Christmas present with news of the sale of the company’s lubricants business Castrol.
Given a healthy dose of speculation that the price tag would be on the low side, the market seems fairly happy with the outcome. The significant proceeds from the transaction will allow BP to make a decent dent in its onerous borrowings pile. It also means it is well on the way to achieving its goal of $20 billion worth of divestments by 2027.
The next key test for BP, which continues to have its feet held to the fire by activist investor Elliott, is a strategic review expected in February. Recently departed boss Murray Auchincloss arguably never recovered from his own strategic reset in February this year which fell short of most investors’ expectations, so BP cannot afford a similar disappointment this time around.
Unlike Auchincloss, freshly appointed chair Albert Manifold and incoming CEO Meg O’Neill are outsiders. This may make it easier to deliver radical change at BP after its failed effort to transform into a green energy powerhouse.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
