Huge BP profits support the European markets
Most of the European major indices gain more than 1% in the first session of November. Positive sentiment on the market is supported by huge earnings from the energy company BP (BP.UK). The company showed the second-highest quarterly profit in history that was more than doubled from result in the same quarter last year. The profit was boosted mainly by gas trading.
BP announced a further share buyback of 2.5 billion USD and increases its dividend as there is huge uncertainty about possible windfall tax, not only in the UK but also in the US as Biden signaled additional tax for energy companies with excess profit. It is interesting that the company showed 8.2 billion USD of underlying replacement cost (preferred measure of profit for the company) which was slightly lower than 8.5 billion USD in the second quarter. On the other hand, it showed a net loss of 2.2 billion USD compared with a profit of 9.3 billion in the second quarter as recent results include inventory holding losses and charges for adjusting items net of tax.
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Open account Try demo Download mobile app Download mobile appOn the chart below we can see a comparison of UK100 and BP prices. UK100 is around 8% off the all-time high from 2018. The further rebound of UK100 was started due to the stabilization of the situation on Downing Street, which today is supported by BP that is approaching an important resistance zone close to 5 GBP per share. It is also worth noting that UK100 is above 50.0 retracement of the downward wave from the highest peak to the lowest low of 2022.
Source: xStation5
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