Shell's disappointment hits Footsie

The rally on London's FTSE 100 Index came to a halt yesterday amid falls from heavyweight oil giant Shell and concerns over escalating violence in Egypt.

A batch of positive economic reports in the US failed to ease investor concerns, with markets on both sides of the Atlantic under pressure.

The Footsie fell 16.73 points to 5,983.34, while Wall Street's Dow Jones Industrial Average slipped despite strong revenue gains in the American retail sector in January.

A report from the US labour department showing fewer people applied for unemployment benefits last week also added little cheer.

Angus Campbell, head of sales at Capital Spreads, said: "For as long as the situation in Egypt continues, the markets will be a little bit nervous.

"Western economies are very reliant on their major export, which is oil of course, but also there are a number of important business relationships we have with that part of the world." Glasgow-based temporary power supplier Aggreko finished at the top of the Footsie risers' board after analysts at BofA Merrill Lynch upgraded their recommendation on the stock from "neutral" to "buy", while brokers at Goldman Sachs also added positive comments. Shares in Aggreko ended the day up 70p or 4.9 per cent at 1,497p.

But the top tier was pulled down by oil firms after Shell disappointed investors with its fourth-quarter results.

A 3 per cent fall for Shell sent it to the bottom of the Footsie, dropping 73.5p to 2,177.5p, after tough downstream trading left profits in the final three months of 2010 short of the $4.7 billion (2.9bn) expected in the City.

The performance overshadowed its 11.5bn profits haul in 2010 and sent rival firm BP down 10.1p to 478p. Oil firms BG and Petrofac also fell, down 28p at 1,434.5p or 27p at 1,566p respectively. But Edinburgh-based Cairn Energy bucked the trend, up 2.8p to 438p.

Aberdeen-based energy services giant Wood Group closed up 12p at 579.5p after revealing that it is considering the sale of its well support division.

The ongoing political unrest in Egypt saw traders pull their cash out of riskier assets and into more defensive stocks such as British American Tobacco, up 35p at 2,388p, and also into the dollar, which rose against the pound and euro. Sterling eased to just over $1.61 as the greenback strengthened.

A busy session for corporate results saw BT Group earn a place near the top of the risers board after third quarter profits lifted 30 per cent on the back of a strong three months for broadband additions.Shares were up 6.4p at 184.9p, a gain of 4 per cent.

Elsewhere in the telecoms sector, mobile phone firm Vodafone announced it expected full-year operating profits to be towards the upper end of the 11.8bn to 12.2bn forecast in November.

The company has been buoyed by strong smartphone and data usage in the UK, but shares failed to respond as the company dropped 0.1p to 177p.

Thomson holidays firm TUI Travel was another top flight faller, dropping 4p to 243p after it warned the troubles in Egypt and Tunisia could hit earnings by up to 30 million.