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Shell reserves fear sees Footsie falter

Edinburgh News: Shell reserves fear sees Footsie falter

MARKET WATCH
Saturday, 26th April 2008

THE Footsie came off the boil today after hitting four-year highs earlier in the week – and as the morning session drew to a close the index was down 15 points at 5786.

Helping lead the blue chip index into the red was oil giant Royal Dutch Shell, whose influence had more of an impact than a strong showing on Wall Street and Japan’s Nikkei index surging 1.4 per cent to close above 16,700 points for the first time in more than five years.

Despite turning in a record annual profit for a British company, investors booked profits on fears that Shell will struggle to find new reserves to replace what it is already pumping out of the ground and shares tumbled by two per cent.

That disappointment spread into other corners of the energy sector and saw BP dip by 0.8 per cent and BG Group edge down by 0.4 per cent.

Helping peg the FTSE-100 slide were strong results from miner Rio Tinto and a slew of broker upgrades for stocks including building materials supplier Wolseley, news and information provider Reuters, and cruise operator Carnival.

Defence group Smiths moved ahead three per cent after positive investor meetings with company executives. Dealers said Smiths also had an upbeat meeting with investment bank Merrill Lynch.

Outside the top flight, Edinburgh-based Wolfson Microelectronics was still finding favour with investors after yesterday’s strong results. It gained another 2.5 per cent.

Heading down the way was Lloyds TSB. It hit the skids, falling 1.4 per cent, after brokers turned cautious on the stock after a flurry of takeover speculation.

DKW downgraded the shares to “reduce” from “hold”, while Exane BNP lowered its stance to “neutral” from “outperform”.

Traders said the overall market felt weary after closing above 5800 points yesterday. The FTSE has risen by about a fifth over the past 12 months.

“You get a feeling that we’re certainly not willing to push this market ahead for the moment,” one dealer said.

http://edinburghnews.scotsman.com/business/Shell-reserves-fear-sees-Footsie.2747545.jp

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