THE FTSE 100 traded sideways yesterday in the face of mixed labour news from the US.
Productivity rose by just 0.7% in the fourth quarter of 2011 and labour cost rose by 1.2%. Jobless claims fell by more than expected to 367,000 last week. The index ended modestly up 5.3 points at 5796.1.
Mining company shares were buoyed by news that Glencore and Xstrata are in talks regarding an all share merger of equals. The takeover panel has set a deadline of March 1. Investors seem convinced the merger will go ahead with Glencore and Xstrata up 6.9% and 9.9% respectively.
Royal Dutch Shell announced disappointing fourth quarter results. On the upside, there was a lower than expected drop in production and higher Liquid Natural Gas sales. But on the downside, there was a 5% drop in European gas volumes due to the mild weather. Difficult conditions in the global refining market also had an impact. The chemicals division performance was better than expected, despite a fire at Royal Dutch Shell’s largest chemical plant in Singapore at the beginning of the quarter. The company announced a new five-year plan. The main highlights include increased capital investment guidance of $30bn with 80% of spending targeted to upstream projects, a target of 4m barrels of oil equivalent per day (BOEPD) by 2017/18 and a target to grow cash flow by 30-50% between 2012 and 2015.
A raft of broker updates shook things up in the North 40 Index yesterday. Go Ahead Group received a downgrade and its shares fell 1.1% to 1273p. Although not directly affected, an upgrade of Bovis Homes and a downgrade for Taylor Wimpey saw fellow North East house builder Bellway homes rise 0.3% while Barratt Developments fell 0.2%.
The region’s biggest movers were E-Therapeutics up 3.9% and GlaxoSmithKline down 2.0%.
carmen.baylis@brewin.co.uk
