Royal Dutch Shell Plc  .com Rotating Header Image

Recession fears drag FTSE down: Royal Dutch Shell was 5% lower with rival BP down 1%

The Independent

PA

Thursday, 16 October 2008

London’s leading share index was pegged nearly 3% lower today as recession fears dragged on trading.

The FTSE 100 Index initially opened more than 5% down following heavy falls for global markets overnight, but losses were pared back through the morning amid hopes of a recovery later for Wall Street.

By lunchtime the Footsie was down 101.8 points at 3976.6 – a drop of 2.5%.

Among the biggest blue chip victims today were companies exposed to the ailing housing market after building supplies firm Travis Perkins issued a profits downgrade.

The FTSE 250 company, which owns DIY chain Wickes, saw its shares slump by more than a third after telling investors recent trading had been worse than expected.

B&Q owner Kingfisher saw its shares fall more than 7%, while the owner of the Build Center chain, Wolseley, dropped more than 12%.

Energy stocks were the other big losers as oil prices slid to a 14 month lows near 71 US dollars a barrel. Royal Dutch Shell was 5% lower with rival BP down 1%.

British Airways, which is seen as one of the most exposed businesses to a worldwide economic slump, was down 2% – much improved from the 10% dive seen early on.

Today’s Footsie fall followed a drop of more than 7% yesterday. It also came after an 11.4% plunge for Japan’s main Nikkei index overnight.

Last night New York’s Dow Jones Industrial Average also closed down nearly 8% as jittery investors dumped shares after sobering reports on the US economy.

Other European stock markets started off today with heavy losses, but also rowed back. Germany’s Dax was down 1.6% and France’s CAC 40 3% lower.

The latest turmoil has come despite the huge banking sector rescue packages announced around the world this week by governments desperate to end the global financial crisis.

In London, the battered banking sector was experiencing mixed fortunes in the wake of the Government’s rescue plan announced on Monday which will see taxpayer funded cash injections of up to £37 billion in HBOS, Lloyds TSB and Royal Bank of Scotland (RBS).

HBOS – seen as the weakest of the trio – was down 3% today, while merger partner Lloyds TSB rose nearly 5%. RBS shares were 2% higher.

The banks saw their shares outperform the wider market falls yesterday amid hopes the Government’s bail-out scheme could be reworked slightly to allow dividend payments to investors.

Investor concern over this element of the package is understood to be behind volatility in the banks’ share prices over the past few days. There is also speculation it may scupper the merger plans of Lloyds TSB and HBOS, which have yet to be approved by shareholders.

Analysts and investors are focusing more strongly on the growing economic woes accelerating around the world.

Yesterday’s US stock market misery followed a survey which showed economic activity weakening across the nation. Retail sales also dropped sharply in September, with the 1.2% decline the biggest in three years and the third monthly drop in a row – the first time that has happened since the US government began keeping comparable records in 1992.

More gloomy economic data is expected later today in the form of industrial production figures.

In the UK, there was more evidence of a worsening economy after unemployment staged its biggest jump for 17 years to 1.79 million.

THE INDEPENDENT ARTICLE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.