FTSE close: Shell down; RBS, Lloyds up

 

A better-than-expected performance by the world's biggest economy gave investors a boost after yesterday's bleak session.

The sign and logo of the London Stock Exchange

The news that the US economy expanded by an annualised 3.5% in the third quarter saw the Dow Jones open 106.6 points up at 9,869.3. And it lifted the FTSE 100 from a moribund morning to stand 57.3 points higher at 5,137.72 at close.

Miners benefited from the improved economic sentiment as shares in Kazakhmys lifted 73p to 1186p, Xstrata added 65p to 947p and Anglo American rose 122p to 2300p.

Shares in part-nationalised Royal Bank of Scotland and Lloyds Banking Group led the way - up 3.77p to 43.37p and 6p to 86p respectively - after Lloyds began sounding out investors about a £25 billion fundraising.

Lloyds also said a restructuring plan being thrashed out with European regulators was unlikely to have a material impact on the group.

This came as a relief to investors in both RBS and Lloyds after this week's break-up of Dutch bank ING raised fears about large scale sell-offs.

Royal Dutch Shell was the biggest faller after its third quarter results received a lukewarm response.

The profits haul was slightly ahead of expectations, but this failed to make an impression on the City after rival BP smashed forecasts on Tuesday. Shell shares were down 55p at 1,856p, a drop of 3%. BG Group also dropped 3p to 1092p, but BP clung to recent gains as shares rose by 2.1p to 586.5p.

Among other companies reporting results today, AstraZeneca slipped 1.33% despite reporting a 22% rise in third quarter profits and raising its full-year earnings guidance for the second quarter in a row.

In the FTSE 250 index, National Express fell 11.96% or 43.6p to 321p as it snubbed a takeover move by Stagecoach and said it would press ahead with its own fundraising plans.

Directories firm Yell, which is also battling to secure its long-term financial position, recovered from the weak start seen after it was forced to give lenders an additional day to approve a restructuring plan. Shares later recovered to stand 2.81p higher at 49.15p.

The biggest gain in the FTSE 250 Index came from defence services firm Qinetiq, which climbed 16% or 22.5p to 165.4p after appointing former De La Rue boss Leo Quinn as its new chief executive.

TOMORROW IN THE CITY

• Sir Martin Sorrell's advertising giant WPP updates the market on its third-quarter trading: it is expected to show a sharp fall in sales on the same time last year.

• Shire, Britain's number three pharmaceuticals firm, finishes off the drug company reporting season with its third-quarter results.

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