London’s FTSE 100 falls for second day as Shell weighs

  • FTSE 100 down 0.8%, FTSE 250 adds 0.4%
  • Imperial Brands rises on share buyback plan
  • Weaker refining, gas trading to hit Shell’s Q3 results
  • Construction activity improves unexpectedly

Oct 6 (Reuters) – UK’s FTSE 100 index fell on Thursday with Shell weighing on the commodity-heavy index after the oil major said its third-quarter profits would be pressured as concerns grew over a global economic slowdown.

The benchmark FTSE 100 (.FTSE) closed 0.8% down, while the more domestically oriented FTSE 250 added 0.4%.

Shell (SHEL.L) slid 2.8% after the oil major said its third-quarter profits would be pressured by a near-halving of oil refining margins, crumbling chemical margins and weaker natural gas trading. read more

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Peer BP Plc was flat.

“The message from Shell is being seen as a proxy for the oil and gas industry in general, that is the excess profits that they were making previously are now coming to an end as the price of oil comes down,” said Stuart Cole, head macro economist at Equiti Capital.

“But beyond this, the underlying message is that demand for oil and gas, refined products, plastic is falling, which is being seen as a sign of falling global demand.”

Mining stocks (.FTNMX551020) slid 1.4% with Anglo American (AAL.L) leading losses as Berenberg cut the miner’s rating to “hold” from “buy”.

The FTSE 100 was still headed to end the week higher as investors assessed the British government’s reversal of tax cuts in its new fiscal policy and a fall in global bond yields spurred appetite for riskier equities early in the week.

Capping some losses, Imperial Brands (IMB.L) added 2.5% on announcing a 1 billion pounds ($1.13 billion) share buyback programme and said FY22 trading was in line with expectations.

Fitch, meanwhile, lowered the outlook for its credit rating for British government debt to “negative” from “stable”, days after a similar move from rival Standard & Poor’s following the government’s Sept. 23 fiscal statement. read more

Activity among British construction companies improved unexpectedly last month, although the outlook darkened as growth in new orders dried up, a survey showed. read more

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Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; editing by Uttaresh.V and Bernadette Baum

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