FTSE Close: Rolls-Royce falls; M&S, BSkyB up

By Ed Monk for Thisismoney.co.uk
Updated:

 

17.00 (close)

Dealers monitor their screens on the trading floor of IG Index in London

Blue Monday: Shares are seen opening lower today.

Rolls-Royce shares pulled out of their nosedive today as the group said it was making progress on finding the cause of the engine failure that forced a Qantas jet to make an emergency landing.

The manufacturing group closed 3% higher having fallen 4% in early trading after the chief executive of Qantas said oil leaks were found in three engines on its A380 fleet.

The wider FTSE 100 Index paused for breath after last week's impressive rally, down 25.4 points to 5850, although it remained near recent two-year highs.

Wall Street's Dow Jones Industrial Average was down nearly 60 points, after its recent surge triggered by the Federal Reserve decision last week to pump a further $600bn (£372bn) into the world's largest economy.

The dollar strengthened a little against the pound and euro after slumping following the Fed's announcement.

Sterling eased back by 0.4% to $1.61, having reached nearly $1.63 last week.

Investors were more cautious on stocks ahead of figures over the next few days from the likes of Vodafone, Marks & Spencer and BT.

Royal Bank of Scotland was at the bottom of the Footsie after losing 5% on Friday following third quarter figures showing it slipped into the red by £1.4bn. Shares in the part-nationalised player were down another 1.4p to 43.6p.

Barclays was also down 4.2p at 285.7p, while Lloyds was off 1.2p at 68.3p.

Rolls-Royce provided much of the focus again today as its engine drama unfolds.

The group's statement helped provide some shares relief - up 16p at 607p - confirming the incident was specific to its Trent 900 engine and assuring that this was the first such failure on one of its large civil engines for 16 years.

Blue chip fallers included utility stock Scottish & Southern Energy after brokers at Nomura cut their rating on the firm, sending shares down 2% or 18p to 1122p.

Ahead of tomorrow's interim results and strategy review by chief executive Marc Bolland, Marks & Spencer shares were 4.9p higher at 413.2p, while Primark owner Associated British Foods added 2p at 1073p ahead of its own figures.

Elsewhere, BSkyB rose 8p to 728p after announcing it had reached its target for 10 million television customers before the end of the year.

In the FTSE 250, property group Savills rose 13.5p to 359.8p after upping profits guidance following a particularly strong performance in Asia and the UK.

But fund manager Gartmore suffered a shares tumble - down 15% - after it said it was embarking on a strategic review and announced the retirement of star manager Roger Guy - the latest in a recent string of key departures. Shares in Gartmore plunged 18.9p to 107p.

The biggest Footsie risers were Inmarsat up 20p to 695p, Rolls-Royce ahead 16p to 607p, Compass up 13.5p to 537p and Cobham up 4.6p to 209.4p.

The biggest Footsie fallers were Royal Bank of Scotland down 1.4p to 43.6p, Anglo American off 73.5p to 2955.5p, Serco Group down 13p to 560p and Tullow Oil down 25p to 1226p.

15.55: With the close in sight, light trading today has left the FTSE 100 30.5 points lower at 584.02.

14.30:

In currency markets, the pound is slightly down over the day against the dollar, at $1.6153 compared to $1.6224 at the previous close.

We've got some expert comment today from Phil Suttle, the chief economist of the Institute of International Finance in Washington DC.

He explains that American policymakers will be happy to keep the dollar weak for some time to come, to the annoyance of the rest of us.

Meanwhile, the FTSE 100 is 24.45 points lower at 5850.90.

13.30:

A lunchtime update - The FTSE has limped lower today and is now 21.2 points worse off at 5854.15.

Rolls-Royce has pulled out of its early session nosedive in the wake of last week's engine failure on an A380 operated by Qantas. [Read the story]

Rolls shares fell 4% after opening, but recovered to stand 5p lower at 586p.

It was joined on the fallers board by utility stock Scottish & Southern Energy after brokers at Nomura cut their rating on the firm, sending shares down 2% or 19p to 1121p.

Royal Bank of Scotland continued its downward descent after losing 5% on Friday following third quarter figures showing it slipped into the red by £1.4bn.

Shares in the part-nationalised player were down another 0.6p to 44.5p.

In the FTSE 250, property group Savills rose 11.1p to 357.4p after upping profits guidance following a particularly strong performance in Asia and the UK.

But fund manager Gartmore suffered a shares tumble - down 17% - after it said it was embarking on a strategic review and announced the retirement of star manager Roger Guy - the latest in a recent string of key departures.

Shares in Gartmore plunged 21.5p to 104.4p.

11.15:

Gold is hovering around another record high, nearing $1,400 an ounce on comments from World Bank boss Robert Zoellick.

Gold hit $1,398.35 an ounce in early trade today, following Mr Zoellick's comments that leading economies should consider readopting a modified global gold standard to guide currency movements.

Gold later retreated to around $1,391 an ounce as speculators booked profits, and other analysts said the bullion market was still digesting his comments.

Read more on this story and get updated gold prices.

We also have more on builder Rok entering administration.

The FTSE 100 at 11.15am is 19.1 points lower at 5856.25.

10.10:

The FTSE 100 fell back today as investors took profits from a two-year high last week, with Rolls-Royce falling like an A380 engine and M&S and BSkyB higher.

A surprise jump in US employment on Friday spurred global shares higher and the Footsie hit its highest mark since the summer of 2008 last week.

At the start of a week due to feature results from Vodafone, Marks & Spencer and BT, investors were happy to sit on the sidelines, leaving the FTSE 100 Index 14.84 points lower at 5860.51.

The biggest move of the session came from Rolls-Royce as shares continued to suffer in the wake of last week's engine failure on an A380 operated by Qantas. The boss of the Australian airline added to pressure on the UK firm by revealing oil leaks were discovered in three engines on its grounded superjumbo fleet.

Rolls shares have now lost £1.5bn in value after dropping another 20.5p to 570.5p today.

Ahead of tomorrow's interim results and strategy review by chief executive Marc Bolland, Marks & Spencer shares were 5.7p higher at 414p, while Primark owner Associated British Foods added 7p at 1078p ahead of its own figures.

Elsewhere, BSkyB rose 5p to 725p after announcing it had reached its target for 10m television customers before the end of the year.

Outside the top flight, small cap building firm Rok today put itself into administration months after serious failings were uncovered at its plumbing division.

This year Rok reported half-year losses of £3.8m, after accountants BDO sizeable losses and financial shortcomings at its plumbing, heating and electrical business.

Its shares had hit 18.75p on Friday before the firm asked the Financial Services Authority to suspend the listing.

On Wall Street later today the furtures markets have the Dow Jones opening lower.

Reader service: Free brochure guides

Completely free insider guides on the latest investing trends...

sterling stacked on a financial chart

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Most watched Money videos