Week ahead: FTSE traders eye Shell and BT results as Bank of England prepares for another rate hike

London traders are gearing up for a big week of corporate results, with UK giants Shell, BT Group, Glencore, GSK and Vodafone Group updating markets.

Shell is due to announce their final results for 2022 on Thursday and are expected to post record profits as oil giants continue to benefit from the global energy boom. 

Newly appointed chief executive Wael Sawan will front the announcement this week in which he is expected to announce the huge profit take of $28bn (£22bn).

Michael Hewson, chief market analyst at CMC Markets UK, said the decision to buyback billions of dollars of their own shares, rather than increase the amount of investment in renewable sources of energy, is likely to draw criticism.

However, the company has been exposed to a windfall tax by the UK government designed to help partially pay for cost of living support.

Shell’s dividend has also been lifted by 15 per cent, likely to please shareholders. The oil megacap’s shares are already up more than a quarter over the last year.

BT Group will announce their third quarter results on Thursday. Despite a short lived rally in December, its shares are still down 30 per cent from their peak.

Glencore publishes a production stock take for 2022, whilst GSK will announce their full year results, both on Wednesday. 

Vodafone Group is set to release third quarter results on the same day and Investors will be eyeing whether inflation and higher energy bills have kept squeezing its earnings after its results back in November were hit by similar dynamics.

After a strong start at the beginning of 2023, London’s premier FTSE 100 index fell slightly last week by 0.07 per cent this week to 7,765.15 points, while its domestically focused peer FTSE 250 increased by 1.69 per cent to 20,035.39 points. 

FTSE 100 edged lower last week

The FTSE 100 and other big indexes are likely to be wobbled by the world’s big central banks, the US Federal Reserve, Bank of England and European Central Bank lifting interest rates yet again, although the moves will edge them closer to the end of their respective hiking cycles.

Bank governor Andrew Bailey and his rate setting committee are expected to sign off on a 50 basis point rise to four per cent, the tenth hike in a row.

His cross-Atlantic peer, Jerome Powell, will slow down to 25 basis points, but investors will be more concerned with his post-decision press conference in which he is expected to set out when the Fed will stop heaping pain on households and firms via tighter financial conditions.

The ECB is far behind the Fed and Bank and will opt for another 50 point rise on Thursday, although that certainly will not be the last forceful hike this year. Analysts at investment bank Nomura are pencilling three such moves in 2023.