London midday: Shell paces decline after slashing dividend
London stocks were lower by midday on Thursday, with oil giant Shell pacing the decline as it cut its dividend for the first time in 80 years.
The FTSE 100 was down 0.7% at 6,070.55, having rallied a day earlier as investors welcomed news that Gilead Sciences’ antiviral Remdesivir drug had helped improve outcomes for patients with Covid-19.
CMC Markets analyst David Madden said traders were likely booking some profits following Wednesday’s strong gains.
"It seems as if the bulls are just taking a breather for now as people are still optimistic that governments will move towards easing lockdown restrictions," he said.
Investors were looking ahead to the release of US initial jobless claims at 1330 BST and the latest policy announcement from the European Central Bank at 1245 BST.
"Dealers will be looking to see if the central bank is wholeheartedly committed to assisting the eurozone in this time of huge uncertainty," Madden said. "Last night, the Fed made it clear they are willing to do what it takes to overcome the crisis, so the standard has been set for the ECB."
In equity markets, Royal Dutch Shell was the worst performer after it slashed its first-quarter dividend by 66%, saying it was "imprudent" to maintain payouts at pre-coronavirus levels with an uncertain demand outlook and oil prices at rock bottom. Net income attributable to shareholders on a current cost of supplies (CCS) basis excluding identified items, plunged 46% year on year to $2.8bn as prices and demand slumped due to the Covid-19 pandemic.
Hargreaves Lansdown was under pressure after around 6.05m shares in the investment platform were placed at 1,550p. According to traders, PHL Limited, which is controlled by co-founder Stephen Lansdown, sold around £100m worth of shares in the company. overnight. The placing price represents a 6% discount to the closing share price on Wednesday.
Lloyds Bank was in the red as it said first-quarter pre-tax profits slumped 95% to £74m as the company took a "significantly" increased impairment charge of £1.4bn and pulled guidance due to the coronavirus pandemic.
Sainsbury's shares fell after it put its dividend on hold as the supermarket group warned conditions were too uncertain to make a decision at this stage in the Covid-19 crisis. Underlying pre-tax profit for the year to 7 March fell 2% to £586m as group sales rose 0.1% to £32.4bn. Reported pre-tax profit rose 26% to £255m.
On the upside, Flutter Entertainment rallied to the top of the FTSE 100 as it said completion of its acquisition of The Stars Group was due to take place next week.
Hikma Pharmaceuticals rose after saying it was confident in its outlook for the year as the company sold more products during the Covid-19 crisis.
Consumer goods giant Reckitt Benckiser advanced after it lifted its full-year outlook and reported a jump in first-quarter sales as demand for its products was boosted by the coronavirus pandemic.
Market Movers
FTSE 100 (UKX) 6,070.55 -0.73%
FTSE 250 (MCX) 16,782.40 -0.31%
techMARK (TASX) 3,657.28 0.58%
FTSE 100 - Risers
Flutter Entertainment (FLTR) 10,100.00p 6.95%
Reckitt Benckiser Group (RB.) 6,708.00p 4.78%
Hikma Pharmaceuticals (HIK) 2,440.00p 4.68%
Carnival (CCL) 1,209.50p 4.22%
AstraZeneca (AZN) 8,485.00p 3.39%
Smith & Nephew (SN.) 1,615.00p 2.47%
Scottish Mortgage Inv Trust (SMT) 682.00p 2.17%
Sage Group (SGE) 637.00p 1.66%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,150.00p 1.57%
Severn Trent (SVT) 2,429.00p 1.55%
FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 1,352.00p -6.85%
Royal Dutch Shell 'A' (RDSA) 1,390.80p -6.39%
Royal Bank of Scotland Group (RBS) 113.00p -6.19%
Hargreaves Lansdown (HL.) 1,549.00p -6.06%
Lloyds Banking Group (LLOY) 32.77p -5.72%
Sainsbury (J) (SBRY) 198.25p -4.41%
Meggitt (MGGT) 287.80p -3.75%
Next (NXT) 4,792.00p -3.68%
Rolls-Royce Holdings (RR.) 344.80p -3.58%
St James's Place (STJ) 870.40p -3.52%
FTSE 250 - Risers
Marston's (MARS) 40.50p 16.25%
BMO Commercial Property Trust Limited (BCPT) 78.40p 8.89%
Petrofac Ltd. (PFC) 200.50p 6.34%
Cairn Energy (CNE) 119.50p 5.85%
Premier Oil (PMO) 32.25p 5.81%
ICG Enterprise Trust (ICGT) 744.00p 5.08%
Playtech (PTEC) 242.20p 4.76%
Mitchells & Butlers (MAB) 178.80p 4.44%
Dechra Pharmaceuticals (DPH) 2,814.00p 3.76%
JPMorgan Indian Investment Trust (JII) 526.00p 3.54%
FTSE 250 - Fallers
Virgin Money UK (VMUK) 84.04p -6.39%
Network International Holdings (NETW) 424.60p -5.77%
Foresight Solar Fund Limited (FSFL) 110.00p -4.76%
WH Smith (SMWH) 1,259.00p -4.26%
Crest Nicholson Holdings (CRST) 273.60p -4.20%
Bodycote (BOY) 597.00p -4.02%
Ferrexpo (FXPO) 138.30p -3.96%
Investec (INVP) 171.15p -3.93%
Euromoney Institutional Investor (ERM) 841.00p -3.89%
PayPoint (PAY) 670.00p -3.87%