Markets: BG shares slump on production cut

By PETER RANSCOMBE
Published on 01/11/2012 00:00

GAS producer BG Group sank to the foot of the Footsie yesterday after admitting output was unlikely to grow next year.

Following the prolonged shutdown of the Elgin platform in the North Sea after a gas leak in March and its decision to scale back drilling in the US, production will grow just 3 per cent this year, with no growth forecast for 2013. Despite posting a better-than-expected 16 per cent rise in third-quarter profits to $1.2 billion (£745 million), on the back of a 5 per cent rise in production, shares in the group slumped 182p, or 13.7 per cent, to 1,147.5p after the update.

The huge fall in the company’s share price dragged down the broader FTSE 100 index, which fell 1.2 per cent or 67.2 points to close at 5,782.7.

Drugs giant and fellow Footsie stock GlaxoSmithKline called on European governments to halt aggressive price cuts on medicines or suffer “unintended consequences”.

Its warning came as it posted a 13 per cent drop in third-quarter profits to £2bn. Shares fell 2.4 per cent or 33.5p at 1,386.5p.

Barclays was another big faller – down 5 per cent or 11.3p at 227.5p – after it admitted US authorities were looking into transactions between the bank and Middle East investors.

Among the Scottish stocks, Edinburgh-based CCTV systems maker IndigoVision dropped 16.3 per cent or 80p to close at 411.5p after turning ex-dividend, meaning investors buying the stock now won’t be entitled to the bumper full-year dividend unveiled in September.

NEW YORK: Wall Street closed little changed last night after a forced two-day closure due to super storm Sandy, as gains in utilities and financial shares offset declines in the healthcare and technology sectors.

Home Depot and Lowe’s rose as investors anticipated more business for the home improvement chains as people made repairs in the aftermath of the devastating storm.

The Dow Jones industrial average dipped 10.75 points, or 0.08 per cent, to end at 13,096.46 while the Standards & Poor’s 500 index edged up 0.22 point, or 0.02 per cent, to finish at 1,412.16. The Nasdaq Composite fell 10.72 points, or 0.36 per cent, to close at 2,977.23.

• Additional reporting by Peter Ranscombe and Sean Miller