Must read: BP and Fresnillo lift FTSE 100
ii’s head of investment rounds up the morning’s big news.
5th August 2025 09:24
by Victoria Scholar from interactive investor
GLOBAL MARKETS
The FTSE 100 is in the green lifted by Fresnillo (LSE:FRES) and BP (LSE:BP.) thanks to encouraging results from both companies. Markets await the latest PMI figures trickling out from European countries this morning.
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It is a case of bad news is good news for markets this week with disappointing US data sparking hopes of a Fed rate cut. Asian markets mostly gained overnight with the ASX rallying over 1% and the Nikkei logging a solid gain. China’s services PMI hit a 14-month high in July, reaching 52.6, considerably higher than the 50-boom-bust dividing line.
US futures are pointing higher, on track to extend gains after logging their biggest daily jump since May, rebounding after Friday’s sell-off. Tesla Inc (NASDAQ:TSLA) outperformed after CEO Elon Musk was awarded around $29 billion in shares.
BP
BP reported second-quarter underlying replacement cost profit of $2.4 billion (£1.8 billion), sharply ahead of expectations for $1.8 billion but down from $2.8 billion in the same period last year. The stock is trading higher, up by over 2%, hovering near the top of the FTSE 100.
BP says it is initiating a further cost review, which is unsurprising given this week’s report in the Financial Times which said that the oil giant is under pressure from activist investor Elliott Management to accelerate its cost savings.
BP upped its quarterly dividend to 8.32 cents from 8 cents and kept its buyback programme at $750 million. BP reiterated that it expects a total shareholder distribution of 30-40% of operating cash flow over time.
BP said trading ‘delivered well’ during challenging conditions, unlike Shell (LSE:SHEL), which saw trading struggle in the quarter amid the market volatility.
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- The stock paying half of all FTSE 100 dividend income in August
As BP continues to focus on fossil fuels, away from green energy, the oil giant announced its largest oil and gas discovery in the past 25 years off the coast of Brazil this week.
With better-than-expected net income, an increase to the dividend, and this week’s monumental oil and gas discovery, there’s plenty for investors to feel upbeat about.
The mood music around the stock has been quite negative this year with rival Shell outperforming and with oil prices down 10%.
While BP’s fossil fuel focus is not to everyone’s taste, for many income seekers, BP remains a mainstay in portfolios thanks to the company’s sheer scale, which allows it to offer a continued punchy yield.
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