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Today’s market overview

After Monday’s flurry of mergers, European stock markets opened higher on Tuesday, as investors assessed earnings from heavily weighted banking groups such as UBS AG and Barclays PLC.

C TIP UPDATES:

Royal Dutch Shell (RDSB)confirmed that drilling at its Yucatan North appraisal well in the Gulf of Mexico has returned 120 feet of net oil pay. Shell and its partners are now evaluating options for follow-up wells, particularly as the well operated Shenandoah discovery, which encountered more than 1,000 feet of net pay.

UK utility Centrica (CAN) has agreed to acquire a US corporate gas supplier (the New Jersey-based Energy Marketing business of Hess Corp) as part of a $731m (£476m) deal to expand its presence in North America.

KEY STORIES:

Wynnstay (WYN) the agricultural supplier and retail group has entered into a conditional agreement with Carmarthen and Pumsaint Farmers Limited (which supplies agricultural inputs from seven stores in South West Wales) to purchase all of the Society’s business and assets except for its freehold properties for an initial consideration of £4.6m, with an additional two contingent cash payments dependent on the collection by the company of certain accounts receivables.

Barclays (BARC) is to issue £5.8bn in new shares via a rights issue in a bid to plug a £12.8bn capital shortfall created by new regulatory demands. In addition, the bank will issue £2bn worth of bonds that will be turned into shares or wiped out if the bank gets into trouble. (Barclays said adjusted second quarter pre-tax profit fell 17 per cent to £3.6bn).

US ratings agency Moody’s has downgraded its outlook for embattled UK pharma giant GlaxoSmithKline (GSK) from stable to negative. However, Moody’s confirmed that GSK keeps its long-term A1 rating.

Reckitt Benckiser (RB.) has confirmed that despite lower half-year net profits, growth would be at the upper end of targets this year, but the company is being sued by the NHS by as much as £90m in relation to a long-running saga linked to its heartburn treatment Gaviscon.

OTHER COMPANY NEWS:

Meanwhile, BP (BP.) has raised its estimate of compensation claims to $9.6bn in the second quarter and has pushed the overall provision for the Macondo oil spill to $42.4bn. BP originally set aside a total $20bn fund to deal with compensation claims

Deloitte faces a fine of up to £20m and the suspension of one of its partners after a tribunal ruled that the accountants had failed to manage conflicts of interest when advising MG Rover Group and the “Phoenix Four” directors who bought the British carmaker before it collapsed.

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