(For a live blog on European stocks, type LIVE/ in an Eikon
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* FTSE 100 down 0.3%
* Shell slumps 7% after cutting dividend by 65%
* Reckitt Benckiser rises 4% after record sales
By Sagarika Jaisinghani and Joice Alves
April 30 (Reuters) - UK stocks fell on Thursday after Shell
cut its dividend for the first time since World War Two
in the face of a drop in oil demand caused by the coronavirus
pandemic.
The blue-chip FTSE 100 fell 0.5% after opening in
positive territory, slowing the index's path to its biggest
monthly gain since 2011, after three straight sessions of gains.
"Central bank liquidity is pushing all asset prices up, but
reality keeps giving us a very sombre message," said Andrea
Cicione, head of strategy at TS Lombard in London. "And today it
was the dividend cut by Shell".
Shell also suspended the next tranche of its share buyback
programme and said it was reducing oil and gas output by nearly
a quarter after its net profit almost halved in the first
quarter.
Earlier in the session, investors cheered signs of progress
in developing a treatment for the novel coronavirus.
Positive partial results from a trial showed U.S.-based
Gilead Sciences Inc's remdesivir helped speed up
recovery from the disease. That bolstered global optimism on
Thursday, but it wasn't enough to keep British shares in the
black.
The FTSE 100 has recovered about 24% from an eight-year low
it reached in March, but analysts have warned of another selloff
as new data underline the damage to the economy and companies
try to bolster cash reserves as a global recession looms.
Reckitt Benckiser rose 4% after reporting strong
demand for its Lysol disinfectants, Muncie cough syrup and
Dettol soap in the first quarter. It said it now expected
performance in 2020 to be better than initially forecast.
Shares in Lloyds Banking Group were down 4.1% after
the company saw its pretax profit all but wiped out in the first
quarter, after becoming the latest bank hobbled by huge
provisions against expected bad loans caused by the coronavirus
pandemic.
British supermarket group Sainsbury's estimated a hit of 500
million pounds ($623 million) from the costs of dealing with the
coronavirus pandemic and said it would defer any dividend
payment decisions until later in the financial year. Its shares
fell 3%.
AstraZeneca gained 2% after it said it will make and
distribute the coronavirus vaccine being developed by the Jenner
Institute and Oxford Vaccine Group under an agreement with the
University of Oxford.
UK's domestically focussed mid-cap index was down
slightly.
(Reporting by Sagarika Jaisinghani in Bengaluru and Joice Alves
in London; editing by Larry King)
