FTSE in positive territory

BP shares slumped more than 4% today after the oil giant was punished for its failure to meet the City’s estimates on fourth quarter profits.

The company reported a 4% jump in production in 2009, but its refining business was hit by “extremely weak trading conditions”, particularly in the last months of the year.

Profits in the fourth quarter rose 33% to $3.45bn (€2.47bn), but this was below City forecasts as BP shares fell 28p to 566.6p.

The decline of a market heavyweight put pressure on the London market early on, although the FTSE 100 Index later recovered to stand 19.5 points higher at 5266.8. This reflected expectations for a positive start to trading in New York.

With BP under pressure after a disappointing fourth quarter, attention turned to Royal Dutch Shell and the company’s own full-year results on Thursday.

The Anglo-Dutch firm will be under pressure to prove that its restructuring efforts are paying off after a period of under-performance. Shares in Royal Dutch Shell were a penny lower today at 1689.5p.

Elsewhere in the top flight, firms in the utility sector surrendered gains seen yesterday after speculation of a takeover bid for Northumbrian Water.

United Utilities fell 9p to 542.5p and Severn Trent dipped 17p to 1153p.

One of the biggest gains in the FTSE 100 came from Cable & Wireless after the telecoms firm confirmed plans for a March split of its two business divisions and revealed a dividend policy in line with market hopes.

With the company also providing a positive update on trading, shares were 4p higher at 147.3p, a gain of nearly 3%.

Miners also dominated the risers board as Rio Tinto lifted 105p to 3288p and Kazakhmys lifted 41p to 1322p.

Outside the top flight, shares in Dairy Crest were more than 1% higher after it said profits for the nine months to December 31 were slightly ahead of expectations. It hailed a continued strong performance by key brands such as Clover and outlined plans for £75m (€85m) investment in its dairy facilities.

Waste disposal group Shanks moved in the opposite direction after it said annual results will be slightly below previous expectations due to the impact of the recent adverse weather conditions.

The company, which remains the subject of a takeover approach from private equity firm Carlyle, fell 3p to 123.9p.