FTSE surges amid bullish energy sector

Market report Emma Newlands

London’s top-flight index led the charge in Europe after being boosted by the energy sector. Shares in Royal Dutch Shell moved higher after the oil major announced it was restoring its cash dividends after more than two years.

The group confirmed that it was cancelling the scrip dividend programme that was in place since 2015, which gave shareholders the option to receive payments in shares or cash as it battled tough market conditions and a plunge in oil prices sparked by lower demand and a glut in supply. The changes, which reinstate a full cash payout, will come into effect for the fourth quarter interim dividend, the amount of which will be announced at the start of February.

Royal Dutch Shell’s “A” shares topped the bluechip index, up 4 per cent to 2,408p. The company’s “B” shares rose 3.7 per cent to 2,448.5p.

London’s FTSE 100 index closed up 76.75 points at 7,460.65.

David Madden, market analyst at CMC Markets UK, noted Shell’s plans, stating: “Traders are viewing the move as a sign the major oil company is returning to bullish days of before the downturn in the oil market.”

There was also news that Britain’s biggest lenders could withstand a “disorderly” Brexit and still keep lending, the Bank of England said, but it warned of the risks of a no-deal for the UK. HSBC saw its share price rise, closing up 9.7p at 745.3p, for example.

However, Barclays and Royal Bank of Scotland emerged as the weakest of the seven lenders tested and only passed thanks to action they have taken to boost their balance sheets. RBS closed up 3.6p at 271.2p. Shares in the online grocer rocketed after it announced a long-awaited international partnership with French giant Groupe Casino. The firm closed as the worst performer in the mid-cap index, as sales growth was overshadowed by falling profit, and its chief executive resigned.