FTSE finds its feet
The London market found its feet today as chemicals giant ICI launched a new cost-cutting drive and Royal Dutch Shell pleased investors with profits of £1.5m (€2.2m) an hour.
After reeling from losses of 72 points during the previous session, traders took the view that today’s corporate results showed the top 100 firms in the UK were in better shape than their stock prices suggested.
As a result, the FTSE 100 Index rose 30.4 points to 6040.4 by mid-morning - led by ICI and InterContinental Hotels, which was pulled higher by speculation of a private equity-led takeover bid.
ICI lifted 6% or 22p to 392p after it revealed plans to cut costs by removing 2,300 jobs, while analysts also liked its first-quarter results – headlined by profits rising 8% to £91m (€133m) after a surprisingly strong performance at its National Starch unit.
InterContinental Hotels was hot on its heels – up 5% or 48.5p to 993.5p – as investors responded to whispers that private equity firm Permira was lining up a bid.
Oil stocks were up en masse after Shell beat expectations for its profits between January and March and revealed that it was now in a position to spend more than the $5bn (€3.9bn) it had earmarked to buy back shares this year.
Shell ticked 19p higher to 1967p as investors applauded its updated strategy, while BP gained 7p to 684p and BG Group was 3p ahead at 748.5p.
But consumer products giant Unilever retreated 13.5p to 562.5p as investors who hoped for a rebound in sales in Western Europe exited the stock. Underlying sales in its heartland were down 0.5%.
Elsewhere, bar and restaurant operator Mitchells & Butlers fell 4% or 18.75p to 497.25p as hopes of a successful takeover receded after it rejected a £2.69bn (€2.1bn) proposal from tycoon Robert Tchenguiz.
