FTSE close: Shell, Vodafone lower; BT up

 

17.10 (close)

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

Losses: Shell dropped 3% to send it to the bottom of the Footsie

The rally on London's FTSE 100 Index came to a halt today amid falls from heavyweight oil giant Royal Dutch Shell and concerns over escalating violence in Egypt.

A batch of positive economic reports in the US failed to ease investor concerns, with markets on both sides of the Atlantic under pressure.

The Footsie fell 16.7 points to 5983.3, while Wall Street's Dow Jones Industrial Average slipped despite strong revenue gains in the American retail sector in January.

A report from the US Labor Department showing fewer people applied for unemployment benefits last week also added little cheer.

In London, the top tier was pulled down by oil firms after Shell disappointed investors with its fourth quarter results.

A 3% decline for Shell sent it to the bottom of the Footsie, dropping 73.5p to 2177.5p, after tough downstream trading left earnings in the final three months of 2010 short of the $4.7bn (£2.9bn) expected in the City.

The performance overshadowed its £11.5bn profits haul in 2010 and sent rival firm BP down 10.1p to 478p. Oil firms BG and Petrofac also fell, down 28p at 1434.5p or 27p at 1566p respectively.

The ongoing political unrest in Egypt saw traders pull their cash out of riskier assets and into more defensive stocks such as British American Tobacco, up 35p at 2388p, and the US dollar, which rose against the pound and euro.

Sterling eased to just over 1.61 dollars as the greenback strengthened.

A busy session for corporate results saw BT Group earn a place near the top of the risers board after third quarter profits lifted 30% on the back of a strong three months for broadband additions. Shares were 6.4p higher at 184.9p, a gain of 4%.

Elsewhere in the telecoms sector, mobile phone firm Vodafone announced it expected full-year operating profits to be towards the upper end of the £11.8bn to £12.2bn forecast in November.

The company has been buoyed by strong smartphone and data usage in the UK, but shares failed to respond as the company dropped 0.1p to 177p.

Thomson holidays firm TUI Travel was another top flight faller, dropping 4p to 243p after it warned the troubles in Egypt and Tunisia could hit earnings by up to £30m.

Annual results from high street banking giant Santander shone the spotlight on the banking sector, as it reported an 11% rise in UK profits, but warned over margins.

The Spanish firm also revealed the impact of bad debt charges on the wider group, with overall profits down 8.5% in 2010.

Among its UK rivals, Lloyds Banking Group fell 1.4p to 63p, while fellow part-nationalised player Royal Bank of Scotland added 1p to 43.5p.

Consumer goods group Unilever was in the red as it said raw material costs - such as corn, palm oil and soya beans - caused operating margins to drop in the final three months of last year.

While the Dove soap to Magnum firm cautioned over the impact of cost pressures ahead, its 18% rise in full-year pre-tax profits to 6.1bn euros (£5.2bn) in the year to December beat market expectations. Shares in Unilever dropped 1% or 20p to 1837p.

The biggest Footsie risers were Aggreko up 70p at 1497p, GlaxoSmithKline ahead 40.5p at 1168p, BT up 6.4p to 184.9p and Intercontinental Hotels up 38p to 1343p.

The biggest Footsie fallers were Royal Dutch Shell down 73.5p to 2177.5p, Sage off 7.9p to 292.8p, Admiral down 37p to 1696p and Lloyds Banking Group down 1.4p to 63p.

15.10: The Dow Jones has opened down as gloom over the ongoing anti-government revolt in Egypt offset better than expected jobless claims.

The index is off 26.6 points at 12,015.3.

Back in London, the FTSE 100 is 18.3 points lower at 5,981.8.

And it's a similar situation on European markets, where France's CAC 40 is 34.1 points into the red at 4032.4 and Germany's DAX is 0.6 points down at 7183.7.

13.40:

Economic data today includes better service sector numbers, but a warning on food prices and inflation.

The purchasing managers' survey from Markit/CIPS showed the services sector - which accounts for about three-quarters of GDP - grew at its fastest pace in eight months in January, as business recovered from the bad December weather.

The headline services PMI activity index rose to 54.5 in January from a 20-month low of 49.7 in December, the highest since last May and well above forecasts for a reading of 51.4. Here's more.

And The Food and Agriculture Organisation of the United Nations (FAO) today reported that world food prices rose for the seventh month in a row in January, hitting their highest levels since records began in 1990.

That indicates higher inflation here in the UK and even more pressure to raise interest rates. There's more here.

Back in equities, the FTSE 100 is 30.6 points lower at 5969.47.

12.30:

Shares in Royal Dutch Shell are still languishing after its fourth quarter figures failed to impress the City.

We have more details here. The stock is down 69p at 2,182p.

Vodafone is getting the cold shoulder from investors as well, despite predicting full-year profits will hit the top end of forecasts. Its shares are off 1.25p at 175.85p.

We also have an update on Spanish banking giant Santander, which has reported an 11% rise in UK profits last year despite sharp falls in the amounts it lends in mortgages and takes in savings deposits.

Futures trading points to a flat opening on US markets. Fresh jobless claims data and a sales update from Wal-Mart are scheduled later. Merck and Kellogg are among the companies reporting results today.

The FTSE 100 is 27.1 points lower at 5,973.

10.40:

It's a busy day for corprate news. Heavyweights Shell, BT and Vodafone all update the market today.

BT has booked profits of more than half a billion pounds after convincing record numbers of line rental customers to pay for ht full BT broadband service.

BT shares rose 5.5p, or 3%, to 184p after the announcement. You can read more here.

Check back for reports on Shell and Vodafone as well.

Overall, the FTSE 100 is 16.99 points lower at 5983.08.

09.35:

The FTSE 100 dipped today after badly-received results at Shell compounded a worsening picture in Egypt, with BT higher and Vodafone lower.

The blue chip share index was 32.02 points lower at 5968.05 in early trading today.

Royal Dutch Shell's profits haul of £11.5bn for 2010 failed to win over the City today after a disappointing fourth quarter performance.

Shares in the Anglo-Dutch giant slumped 3%, or 73.5p to 2177.5p, after tough downstream trading left earnings in the final three months of 2010 short of the $4.7bn (£2.9bn) anticipated in the City.

This also sparked a fall of 7.4p to 480.6p for rival Bp.

Highlighting geopolitical risks, clashes again overnight between Egyptian President Hosni Mubarak's supporters and demonstrators became increasingly violent.

Brent crude oil futures approached $103 a barrel as Mubarak's supporters opened fire on protesters in Cairo.

A busy session for corporate results saw BT Group top the risers board after third quarter profits lifted 30% on the back of a strong three months for broadband additions. Shares were 5.5p higher at 184p, a gain of 3%.

Elsewhere in the telecoms sector, Vodafone announced it expected full-year operating profits to be towards the upper end of the £11.8bn to £12.2bn forecast in November.

The company has been buoyed by strong smartphone and data usage in the UK, but shares failed to respond as the company dropped 1.2p to 175.9p.

Thomson holidays firm TUI Travel was another top flight faller, dropping 1.7p to 245.3p after it warned the political unrest in Egypt and Tunisia could hit earnings by up to £30m.

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