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Ukraine violence weighs on FTSE despite Shell surprise

by Daniel Grote on Apr 30, 2014 at 11:35

Ukraine violence weighs on FTSE despite Shell surprise

A fresh outbreak of violence in the Ukraine has weighed on investor sentiment, keeping a lid on FTSE 100 gains despite impressive results from Royal Dutch Shell (RDSb).

The FTSE 100 rose just nine points, or 0.1% to 6,780 as pro-Russian separatists escalated their revolt in Ukraine's industrial east.

Shell rose 5% to £25.52 after the petrol giant's impressive results for the first quarter of 2014. Net income jumped from $2.9 billion (£1.7 billion) to $7.3 billion, beating investors' expectations by around $2 billion.

Investec analyst Neill Morton placed his £22.50 price target for the shares and forecast under review following the news. 'The cold US winter and global liquefied natural gas (LNG) trading were key (but unquantified) drivers and the addition of Repsol's LNG assets were timely,' he said. However, he noted that Shell traditionally enjoyed strong first quarters and cautioned against 'over-extrapolation' of the positive numbers.

Tullow Oil (TLW.L) meanwhile jumped 18p, or 2.1%, to 883.4p after it announced the sale of parts of its Schooner and Ketch gas fields in the North Sea and confirmed guidance for the rest of the year.

'Based on the initial consideration of £35 million, this suggests a sale price of around $9.6 per barrel, which we believe reasonable due to the maturity and gas content of the assets,' said analysts at Liberum.

Rolls-Royce's (RR.L) announcement that it was talking to Siemens about a possible sale of its gas turbine and compressor business was also welcomed by investors. The engine maker rose 21p, or 2.1%, to £10.43.

Shire (SHP.L) edged up 63p, or 1.9% to £33.27 after a turbulent day of trading yesterday when it surged before giving away its gains after initial excitement over a possible takeover by US Botox manufacuter Allergan waned. 

BG Group (BG.L) continued its recovery from Monday's slump prompted by the departure of chief executive Chris Finlayson. The oil and gas group jumped 16p, or 1.4%, to £11.97 as investors continued to speculate the departure could raise the chances of a takeover.

Tesco (TSCO.L) was among nine FTSE 100 stocks trading ex-dividend, dropping 9.9p, or 3.3%, to 294p.

Standard Life (SL.L) fell 7p, or 0.5%, to £12.98 after announcing Budget changes to pension rules had led to a 50% drop in annuity sales.

Heritage Oil (HOIL.L) soared 22.5%, by 57.5p to 313.1p, after Energy Investment Global agreed a cash offer of 320p a share for the FTSE 250 company.

Thorntons' (THT.L) share price melted after the chocolatier announced a third quarter drop in sales year-on-year. The FTSE small cap stock fell 24.5p, or 17.3%, to 117.5p.

Better-than-expected eurozone inflation figures helped the euro jump to $1.3831, having earlier hit a low of $1.37705. Eurozone inflation was 0.7% in April, calming fears over deflation that had been sparked by a 0.5% reading for March.

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