adminLONDON — UK shares inched lower yesterday, as a slump in Standard Chartered, hit by a quarterly loss and a slowdown in its core emerging markets, outweighed gains from major oil and gas firms.
Standard Chartered shares fell 6.4 percent after the bank reported a third-quarter loss, announced plans to raise $5.1 billion in new capital through a rights issue and said it would cut 15,000 jobs by 2018.
“It would appear that . . . Standard Chartered has belatedly realised that its old business model was broken, and now faces a struggle to catch up in a market where its competition has a significant head start,” Michael Hewson, chief market analyst at CMC Markets, said in a note.
The blue-chip FTSE 100 index was down 0.1 percent at 6,358.10 points at 09h12 GMT, having closed flat in the previous session. Royal Dutch Shell and BG Group rose 0.9 and 1.4 percent respectively after Shell announced plans for further benefits and cost cuts from its planned $70 billion takeover of BG.
“Shell has come out to assuage investors that they can make this takeover work. . . it seems that investors are taking them at their word for the time being,” said Brenda Kelly, head analyst at London Capital Group.
Tobacco stocks edged higher, with Imperial Tobacco Group up 0.8 percent after the company said that it was well placed to meet expectations for the 2016 financial year after reporting acceleration in underlying tobacco net revenue for the end to its 2015 year.
Its peer British American Tobacco also advanced 0.6 percent.
House builders were in negative territory, with Barratt Developments, Taylor Wimpey and Persimmon all down between 1.3 and 3 percent, after a spate of ratings cuts from broker Liberum, which said that valuations were too optimistic to withstand future margin pressure.
Associated British Foods slipped ingredients businesses was more than offset by a slump in its sugar operation and currency moves. — Reuters.
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