FTSE falls despite energy boost
Energy stocks staged a major rally today after commodity prices rose and Royal Dutch Shell impressed with bumper second quarter profits.
The London market’s top three risers came from the sector, although it was not enough to prevent the FTSE 100 Index from falling 19.1 points at 6435.2 by mid-morning. The drop extends a troubled week for the market after two days of steep declines on the back of persistent fears over the state of America’s sub-prime mortgage market and wider economy.
On a busy day for corporate news, Legal & General was one of the biggest fallers after it said recent storms would have an impact on its general insurance business. That offset solid half-year results and details of a £1 billion share buy-back, as shares fell 8.8p to 141.7p.
Telecoms group BT was another faller despite posting first quarter figures in line with expectations and revealing much higher than forecast customer broadband additions. Shares were off 7.25p at 321p, or 2%.
In the energy sector, BP and Royal Dutch Shell rose by 2% after oil prices hit nearly 77 US dollars a barrel. Sentiment was also boosted by results from Shell, as strong refining margins lifted second quarter profits to more than 7 billion US dollars.
Shell gained 46p to 2060p, BP added 11.5p to 596p and BG Group cheered 20.5p to 808.5p.
The trio were chased higher by drugs firms, with results from AstraZeneca – up 29p at 2705p – adding to the profits boost offered by GlaxoSmithKline yesterday. Glaxo shares were up another 13p at 1288p today.
Retailer and home improvement specialist Kingfisher, parent group of B&Q, enjoyed better fortunes, rose 0.25p at 216.75p as its second quarter trading update came in line with expectations, albeit showing gloomy sales figures for the UK.
