Shell helps prop up FTSE 100

By Johann M Cherian

(Reuters) -UK’s export-oriented FTSE rose on Thursday as gains in Shell, after its bumper profit and plans to boost shareholder returns, helped offset broader concerns about inflationary pressures and a possible recession.

The blue-chip FTSE 100 rose 0.3% to hold at a three-week high, while the mid-cap FTSE 250 gained 0.3%.

Shell rose 3.5% after the refiner reported a slightly better-than-expected quarterly profit of $9.45 billion and announced plans to sharply boost its dividend by year end.

The wider energy sector gained 2.8%.

“There is a slight bias where earnings estimates had been set quite low on prospects of a recession and supply constraints”, Daniela Hathorn, market analyst at Capital.com, said, referring to UK companies in general.

“So, any beat of those expectations is taken as a sign of good times”.

However, not all earning reports on the day were positive.

Unilever jumped 1% in early trading after it raised its full year sales forecast but shed nearly all those gains on a dire assessment of consumer sentiment in Europe and China, two of its key markets.

UK’s financial markets have recovered in the recent days after a taking beating earlier this month on worries about unfunded tax cuts that the previous government proposed.

Britain’s new Prime Minister Rishi Sunak on Wednesday delayed until Nov. 17 the announcement of a keenly awaited plan for repairing the country’s public finances.

“With the change of government, there is a little bit more security that we won’t see any crazy fiscal spending like we did see under Truss”, said Hathorn.

Miners were among the top losers, dragged down by a 3.8% slide in Anglo American as a drop in copper production saw the company report quarterly output broadly in line with last year. The sector was down 3.2%.

Shares of Lloyds Banking Group gave up 1.6% after the lender posted a decline in third-quarter pre-tax profit due to bad loan charges.

Telecom service provider Airtel Africa tumbled 7% after the company missed analysts’ profit estimates as a result of higher costs.

(Reporting by Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D’Souza)