FTSE 100 buoyed by Diageo and Shell

The FTSE 100 ended the day in positive territory on Thursday as strong results from Royal Dutch Shell and Diageo helped investors look past wider economic headwinds.

London’s premier index closed up 27.22 points, or 0.39%, at 6,968.85.

Gains came despite worrying news from the continent, with Italy falling into recession and more rumours that troubled Deutsche Bank and Commerzbank will merge.

Connor Campbell, financial analyst at SpreadEx, said: “The UK index continued to lurk near 7,000 without being able to break through that key level.

“Though the macro-mood may have weakened, especially when compared to the sizeable growth seen soon after the bell, the FTSE was propped up by some key earnings.”

Diageo was the biggest riser on the FTSE 100 after the drinks giant said it would buy back an extra £660 million of shares from investors.

Figures for the first half of the financial year show that British consumers continued to lap up top drinks brands, with overall sales in the UK up 14% in the six months to December 31.

Underlying profit was 12% higher at £2.45 billion. Shares touched record highs and ended 129.5p up at 2,901.5p.

Shares in Royal Dutch Shell were on a tear after the blue chip firm revealed its biggest profit haul for four years after earnings surged 36% thanks to higher oil and gas prices.

The oil major posted underlying earnings of 21.4 billion US dollars (£16.3 billion) for 2018.

Its fourth-quarter profits rose 32% to 5.7 billion US dollars (£4.3 billion) despite more recent falls in the cost of crude, with higher gas prices also boosting the result.

The company’s A shares closed 86p higher at 2,362p while its B shares ended up 83p at 2,368.5p.

Meanwhile, BT shares ended in the red as the firm warned that a disorderly Brexit could hit business and consumer confidence, even as it posted a double-digit increase in profits.

The telecoms giant said it has prepared for a possible no-deal Brexit and that its contingency planning has been focused on ensuring it can “provide uninterrupted service to our customers, including sufficient inventory to protect against potential import delays”.

Shares closed down 1.6p at 232.4p.

The pound was trading 0.1% higher versus the US dollar at 1.313 and was 0.3% up against the euro at 1.146.

Michael Brown, senior analyst at Caxton FX, said: “Sterling is unlikely to significantly extend its gains in the coming weeks unless official confirmation of an extension to Article 50 emerges and as the political uncertainty continues.

“Overall, it is likely that the pound will begin to drift lower ahead of the second ‘meaningful vote’ if the current stalemate continues with a reversal of this month’s gains becoming more likely.”

In Europe, Germany’s DAX fell 0.08% and France’s CAC was up 0.36%.

A barrel of Brent Crude was trading at 62 US dollars, a rise of 10.3%.

The biggest risers on the FTSE 100 were Diageo up 129.5p at 2,901.5p, Antofagasta up 37.2p at 869.8p, Royal Dutch Shell B up 26p at 2,362p and Royal Dutch Shell A up 83p at 2,368.5p.

The biggest fallers on the FTSE 100 were Smurfit Kappa down 120p at 2,202p, Standard Life Aberdeen down 13.4p at 251.65p, Tui down 40.5p at 1,154p and DS Smith down 10.9p at 337.2p.