End of austerity at Shell lifts the FTSE
THE UK’s top share index rose yesterday as oil heavyweight Royal Dutch Shell surged after a solid earnings update and a Bank of England stress test on banks delivered no nasty shocks.
The Iseq rose, but more modestly to 6,874.93.
A rally of more than 20pc in Ocado following an “transformative” deal with French supermarket Casino livened up the session for the country’s mid cap stocks.
The FTSE 100 index extended gains to end the session 1pc higher, the standout European performer thanks to stronger energy and financial stocks.
Shell rose 4pc, leading gainers on the FTSE. The oil and gas major cancelled an austerity dividend policy and boosted cash generation forecasts.
“This strategy update indicates significant progress,” analysts at Jefferies said in a note.
Britain’s FTSE 350 bank index rose 0.7pc. After carrying out its annual health check on lenders, the Bank of England said banks could cope with a “disorderly” Brexit without needing to curb lending or to be bailed out by taxpayers.
Elsewhere, French supermarket Casino signed a deal with Ocado to use the British online retailer’s grocery ecommerce platform to develop its online business, starting with Monoprix.fr.
“This is a transformative deal for Ocado as not only will it expose the firm to a large chunk of the French market, it could also be the launch pad for many more international partnerships,” said
Neil Wilson, market analyst at ETX Capital.
Elsewhere among mid-caps, Pets at Home fell 10.6pc after results and news CEO Ian Kellett will step down and will be replaced by the head of the company’s retail business, Peter Pritchard.