European stock markets opened in the green on Tuesday as conversations and worries over inflation and the rising cost of living linger.
The FTSE 100 (^FTSE) continues building on its gains at the start of years, opening 0.6% higher in London on Tuesday.
Similar to its FTSE rival Shell (SHEL.L) last week, BP (BP.L) reported a surge in profits to £10bn ($12.8bn) in 2021 its highest in eight years. The oil stalwart’s quarterly results were supported by higher gas and oil prices and production which was partly offset by weaker oil trading results. BP crashed to a $20.3bn full-year loss in 2020 due to the coronavirus pandemic.
Shares in the company soared over 2% on Tuesday morning in London, providing the biggest boost to the FTSE 100.
Michael Hewson, chief market analyst at CMC Markets said: “Today’s numbers are welcome news for shareholders, after the horror show of 2020, and politics aside, there is still concern that BP isn’t spending enough in the areas of renewables that it needs to meet its longer-term climate goals.
Read more: Why the energy price cap is going up when oil firms are making billions in profit
“BP’s biggest problem in the longer term, is that all its profits come from its oil and gas operation and productions businesses, which is great news while prices remain high, but may not be so sustainable beyond 2030.”
Meanwhile, Ocado (OCDO.L) shares fell 8% after the online retailer posted steeper losses for last year, with pre-tax losses widening from £52.3m to £176.9m in the year to the end of November 2021.
Elsewhere in Europe, France’s CAC (^FCHI) was up 0.2% after the opening bell and the DAX (^GDAXI) rose over 0.1% in Germany.
It comes as European Central Bank (ECB) president Christine Lagarde on Monday attempted to calm market jitters about rates rises saying there were no signs that measurable monetary policy tightening would be required.
Read more: Shopping lifts UK retail sales in January but ‘challenging months’ ahead
Across the Atlantic, US major benchmarks gave up early gains and finished a choppy trading day mostly lower on Monday amid a renewed decline by tech giants.
The tech-heavy Nasdaq (^IXIC) dragged the wider market, falling 0.6%. This was led downward by a 5.1% drop in Facebook-parent Meta (FB). Meanwhile, Google-parent Alphabet (GOOG) fell 2.1%, Microsoft (MSFT) lost 1.6% and Netflix (NFLX) shares fell 2%.
Wall Street’s blue-chip S&P 500 (^GSPC) declined 16.66 points or 0.4% to 4483.87, while the Dow Jones (^DJI) closed flat.
“Having digested what was an unexpectedly good January payrolls report last week, market attention is now firmly fixed on this week’s US CPI numbers for January for evidence of whether the upswing in prices we’ve seen in the last three months of 2021 is set to show any signs of easing,” Hewson said.
Inflation has been a topic of focus after a sudden and sharp surge in several countries resulting from the restoration global economic activity and bottlenecks in the global supply chain.
Investors are watching to see if global central banks will attempt to head off inflation by accelerating the withdrawal of economic stimulus.
Federal Reserve officials mentioned in December that the bank plans to speed up efforts to withdraw record-low interest rates and other stimulus to cool multi-decade high inflation.
US inflation soared from 5.4% at the end of the third quarter to 7% in last three months of 2021 and is expected to continue to rise.
Overseas, the pan continental Stoxx Europe 600 (^STOXX) gained 0.7%.
Asian stocks were mixed after Wall Street’s fall. The Shanghai Composite (000001.SS) was up 0.7% after reopening following China’s New Year holiday week. The rise came despite a private gauge of the country’s service sector dipping to a five-month low.
The Hang Seng (^HSI) declined 0.9% while the Nikkei (^N225) advanced 0.1% in Japan.
Watch: What is inflation and why is it important?
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