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Introduction: Global stocks reach record highs; BP annual profits slump 16%
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Global stocks hit a new record in Asian trade, led by a three-day rally in Tokyo where the Nikkei jumped to a fresh peak, after Japan’s conservative governing coalition strengthened its grip on power.
Sanae Takaichi’s Liberal Democratic party (LDP) secured a comprehensive victory in Sunday’s election. The Nikkei jumped 2.3% to a new all-time high, and the yen rose for a second day.
The gains pushed the MSCI All-Country World Index 0.2% higher to a new record.
The dollar slipped in Asian trade, and is now flat against a basket of other major currencies.
Ipek Ozkardeskaya, senior analyst at Swissquote, said:
So, the US dollar kicked off the week on the back foot, and upcoming US data from today through Friday will determine whether the pressure continues or whether the greenback finds some relief.
US retail sales today are expected to show slowing growth in December — not great news for the most festive month of the year. On Wednesday, the official jobs report is expected to come in soft, with around 70k non-farm job additions, a steady unemployment rate and slower wage growth at 3.6%.
On Friday, the consumer prices index is seen easing to 2.5% from 2.7% previously. If soft labour data is combined with cooling inflation, US [bond] yields and the dollar could remain under pressure — supporting gold, other metals, Bitcoin and equities, particularly small-, mid-cap and value stocks.
BP has posted a 16% drop in annual profits, with earnings hit in the final three months of 2025 because of sharply lower oil prices.
The FTSE 100 firm reported underlying replacement cost profits – its preferred measure – of $7.5bn (£5.5bn) for 2025, down from $8.9bn in 2024.
It came after fourth-quarter profits plunged 30% quarter-on-quarter to $1.5bn, but were up nearly 30% from the same quarter in 2024. BP said it was putting its share buyback programme on hold to strengthen its balance sheet, to invest in oil and gas opportunities.
Carol Howle, who is running the oil giant on an interim basis until its new chief executive Meg O’Neill starts in April, said:
We are reducing capital expenditure for 2026 to the lower end of the guidance range, while continuing to drive down our cost base. We are also taking decisive action to high-grade our portfolio and strengthen our company, including the execution of our $20bn disposal programme and the decision to suspend the share buyback and fully allocate excess cash to our balance sheet.
O’Neill has been described as a “hard-nosed” outsider who will head BP’s pivot away from green energy.
The Agenda
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9.45am GMT: UK Treasury committee to question Treasury and housing ministers on affordability of home ownership
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1.30pm GMT: US Retail sales for December
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2.45pm GMT: UK Business and trade committee hearing on US-UK trade deal
