FTSE Close: Shell, Pru up; Aggreko, Premier down

By This Is Money
Updated: 12:09 EDT, 28 October 2010

17.00 (close)

Market watcher: Traders will watch house prices and US policymakers today.

Royal Dutch Shell was among those making share gains on the FTSE 100 Index today in a buoyant session for commodity stocks.

The market was also given a boost by positive earnings figures from companies including telecoms giant Motorola, as well as better-than-expected US unemployment data.

The Footsie closed 31.9 points higher at 5677.9, although markets on both sides of the Atlantic have had a mixed week amid speculation over the scale of possible money supply boosting measures by the US Federal Reserve next week.

Tomorrow's third quarter GDP growth figures for the US are likely to fuel further debate over the scale of quantitative easing required to aid the recovery.

The dollar fell back against the pound and the euro after yesterday's gains on market talk that QE in the US may be smaller than hoped.

Sterling rose to nearly 1.60 US dollars.

Among stocks, Shell shares rose 9p to 1962p after higher oil prices and a 5% rise in production meant profits lifted 18% to 3.5bn US dollars (£2.2bn) for the three months to September 30.

BP was also higher with a gain of 4p to 423p, while elsewhere in the resources sector BHP Billiton added 57.5p to 2221p.

Other leading risers included mobile phone group Vodafone, which added 4.4p to 170.7p after third quarter figures posted by France Telecom showed improving mobile revenues trends.

The biggest fall of the session came from temporary power supplier Aggreko, which fell more than 4% or 70p to 1592p, even though the firm lifted its full-year profits guidance.

It was joined on the way down by pharmaceuticals firm AstraZeneca, after analysts at Collins Stewart said third quarter figures were weak, with US trading particularly under pressure.

Shares dropped 106p to 3139.5p.

In the FTSE 250 Index, Hovis-to-Mr Kipling firm Premier Foods posted one of the biggest falls of the session after it said sales were down by 4.2% to £606m in the three months to the end of September, a period which it described as the most difficult since 2007. Shares fell 0.8p to 18p, a drop of 4%.

Outsourcing firm Mouchel saw its shares slump by nearly a third - off 38p to 88p - after it scrapped its dividend and reported a sizeable full-year loss.

Mouchel, which develops infrastructure for councils and Government agencies, experienced a drop in demand after the change of Government in May, as departments reined in spending and postponed or scaled down projects.

On a brighter note, UK Coal shares were 1.25p higher at 34p after it said output from its three deep mines was up more than 40% on a year ago at 1.7m tonnes in the third quarter.

The biggest Footsie risers were Schroders up 70p to 1595p, Arm Holdings ahead 11.6p to 372p, Standard Chartered up 50p to 1825p and Prudential ahead 17p to 630.5p.

The biggest Footsie fallers were Aggreko down 70p to 1592p, AstraZeneca off 106p to 3139.5p, Weir Group down 45p to 1535p and Smith & Nephew off 13.5p to 560p.

14.30: US stocks rose modestly as the dollar slipped, with investors continuing to adjust expectations of further monetary stimulus, while data on the labor market was due later in the morning.

The Dow was up 29 points to 11,155 in early trading.

Equities and the dollar have developed an inverse relationship, exacerbated by expectations the Federal Reserve will announce another round of quantitative easing next week.

'Market movement at this stage is clearly dollar-centric,' said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

'It's the dominant thing in virtually everything the market is focusing on. Any movement in the dollar is going to have a direct impact on equities globally.'

Stronger commodity stocks and a results-day boost for Royal Dutch Shell helped lift the London market.

The FTSE 100 cheered 54 points to 5,699.9 in a week of fluctuating fortunes driven by speculation over the scale of possible money supply boosting measures by the US Federal Reserve next month.

A steadier session for the dollar and better-than-expected profits from Shell - up 10.5p to 1,963p - meant investors were more focused on corporate prospects.

Leading risers included mobile phone group Vodafone, which added 5.2p to 171.5p after third quarter figures posted by France Telecom showed improving mobile revenues trends.

In the FTSE 250, outsourcing firm Mouchel saw shares slump 28% - off 35.5p to 90.5p - after it scrapped its dividend and reported a sizeable full-year loss.

Mouchel, which develops infrastructure for councils and Government agencies, experienced a drop in demand after the change of Government in May, as departments reined in spending and postponed or scaled down projects.

10.00:

The London market's fluctuating performance during this week continued today after a recovery from mining stocks lifted the FTSE 100.

An afternoon rally on Wall Street as the Dow Jones pared losses to 43 points helped the top flight lift 41 points to 5,687.

'It would seem that once again despite all the concerns over Europe and sovereign debt, which have re-emerged, the sell-off over the last couple of days may have presented a buying opportunity,' said Angus Campbell, head of sales at Capital Spreads.

The improvement for mining stocks came during a steadier session for the US dollar as recent speculation about the scale of possible cash injections by the US Federal Reserve started to cool.

The mood in the commodities sector was helped by stronger-than-expected third quarter figures from Royal Dutch Shell. Shares rose 10p to 1,963p after higher oil prices and a 5% rise in production meant profits lifted 18% to $3.5bn (£2.2bn) for the three months to September 30.

BP followed suit with a gain of 5.1p to 424.1p.

And BG Group added 7p (0.6%) to 1,188p after saying it had begun production from Tupi, one of its key fields, in the Santos basin off the coast of Brazil.

Kazakhmys was up 18p (1.4%) to 1,339p. The Kazakh miner posted a 9.3% fall in third-quarter copper production and reiterated its full-year target as demand remained buoyant.

The group said sales to China, the world's biggest consumer of industrial minerals, continued at a rapid pace.

AstraZeneca was the top Footsie fallers, off 75p (2.3%) to 3,172p, as the drugmaker's revenue fell 4% in the third quarter, hit by generic competition to key drugs and the absence of last year's windfall sales of swine flu vaccine.

Aggreko was also out of favour, down 23p (1.4%) to 1,639p. The provider of temporary power raised its full-year outlook again, with Panmure Gordon keeping its 'hold' rating on the stock, saying the good news is all priced in.

Buyers came in for banks ahead of trading statements due over the next couple of weeks. Royal Bank of Scotland and HSBC, both scheduled to issue updates on November 5, rose 0.5p (1.1%) to 45.5p and 7.6p (1.2%) to 664.5p respectively. But Lloyds Banking Group slipped 0.1p (0.2%) to 68.9p ahead of its update on November 2.

Premier Foods posted one of the biggest falls of the session in the FTSE 250 after it said sales were down by 4.2% to £606m in the three months to the end of September, a period which it described as the most difficult since 2007. Shares fell 0.7p to 18p, a drop of 4%.

Meanwhile, UK Coal shares were 1.2p higher at 34p after it said deep mines output was up more than 40% on a year ago at 1.7m tonnes in the third quarter.

Analysts expect markets to remain choppy in the run up to the US November 2-3 policy-setting meeting.

The latest Reuters survey showed most leading economists expect the Federal Reserve to buy between $80bn and $100bn worth of assets per month, with estimates for how much it will eventually spend varying from $250bn to $2tr.

British house prices fell for the third month in four in October, a survey by mortgage lender Nationwide showed, in a sign the downturn in the country's property market is becoming more entrenched.