The FTSE 100 Index held its own above the 4900 level today despite another reserves downgrade by Shell and a poor start on Wall Street.
After falling nearly 17 points earlier in the session, the Footsie regained some poise to stand 7.9 points off at 4908.3 by the end of trading.
Investors gave Shell the cold shoulder after news of a fifth reserves downgrade accompanied its announcement that it made the biggest profits in UK corporate history last year.
The Dow Jones Industrial Average lost 28 points shortly after London’s close as US investors digested worse-than-expected profits at Internet retailer Amazon.com.
Falling unemployment and data showing the slowest quarterly growth in US worker productivity for almost four years – suggesting companies will boost recruitment as the economy expands – sparked fears of a further rate rise by the US Federal Reserve.
In London, figures from the Chartered Institute of Purchasing & Supply indicated accelerating growth in the service sector last month. The pressure on equities intensified, however, with analysts saying they believed the next move in UK interest rates would be up rather than down.
Although Shell bore out market predictions by announcing profits of £9.3bn (€13.5bn), its fifth downgrade – this time of 10% – sent its shares down 1% or 8.25p to 471.75p.
Rival BP followed it down, slipping 3.5p to 534p ahead of next week’s results, but Cairn Energy bucked the trend with a 6p gain to 1139p.
Mining stocks were also in the doldrums despite Rio Tinto saying its annual profits had soared 87% to $2.81bn (£1.49bn / €2.2bn). Rio slipped 30p to 1655p, while BHP Billiton shed 14.5p to 672.5p and Antofagasta fell 24p to 1229p.
In contrast, telecoms giant Vodafone was one of the session’s risers after broker Merrill Lynch advised investors to switch to the stock from BT. Vodafone lifted 1%, up 2p to 137.75p.
BT weakened 0.75p to 203.5p after it offered to open up its telecoms networks, but warned that regulatory uncertainty could jeopardise £10 billion of investment. It pledged to offer rival operators lower wholesale prices, faster broadband services and transparent access to its local network.
Outside the top flight, menswear retailer Moss Bros climbed 5p to 131p after revealing like-for-like sales rose 7% over Christmas.
Foam maker British Vita was the biggest FTSE 250 riser after private equity group Texas Pacific confirmed a revised offer of 335p a share. The stock rose 27p to 347p.
Housebuilder Bellway was 2p higher at 863p after saying it should deliver record annual profits for the ninth successive year.
But construction group Mowlem lost nearly 5% – down 10.25p to 206.5p – after it warned on profits for the second time in two many months.
Biggest risers were Tate & Lyle, up 10.75p at 462.5p, Smith & Nephew ahead 11.5p to 546.5p, InterContinental Hotels up 13.5p to 676.5p and Sainsbury’s ahead 5.5p to 292.5p.
Largest fallers were Rentokil Initial down 4p at 153.75p, BHP Billiton off 14.5p to 672.5p, Antofagasta down 24p to 1229p and Rio Tinto off 30p to 1655p.