Shell profits fail to lift FTSE

Oil giant Royal Dutch Shell has led the FTSE 100 Index into the red as its fourth quarter figures left investors disappointed.

A 3% decline from the heavily weighted stock brought an end to the Footsie’s recent rally, with the top tier down 22.4 points to 5977.6.

Shell fell 70.5p to 2180.5p after tough downstream trading left earnings in the final three months of 2010 short of the 4.7 billion US dollars (£2.9 billion) expected in the City.

The performance overshadowed news of a £11.5 billion profits haul in 2010 and sent rival firm BP down 7.2p to 480.8p.

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% on the back of a strong three months for broadband additions. Shares were 5.1p higher at 183.6p, a gain of 3%.

Elsewhere in the telecoms sector, mobile phone firm Vodafone announced it expected full-year operating profits to be towards the upper end of the £11.8 billion to £12.2 billion 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 1.3p to 175.9p.

Thomson holidays firm TUI Travel was another top flight faller, dropping 3.7p to 243.3p after it warned the political unrest in Egypt and Tunisia could hit earnings by up to £30 million.

Annual results from high street banking giant Santander shone the spotlight on the banking sector, as it reported an 11% rise in UK profits, but warned over margins. The Spanish firm also revealed the impact of bad debt charges on the wider group, with overall profits down 8.5% in 2010.

Among its UK rivals, Lloyds Banking Group fell 0.8p to 63.6p, while fellow part-nationalised player Royal Bank of Scotland added 1.3p to 43.8p.

Consumer goods group Unilever was in the red as it said raw material costs – such as corn, palm oil and soya beans – caused operating margins to drop in the final three months of last year. Shares in Unilever dropped 1% or 23p to 1834p.