(Alliance News) - Stocks in London lacked direction on Friday morning ahead of the festive break next week, with Shell reporting mixed trading in the last quarter of 2019 amid weak macroeconomic conditions.
Adriaan Pask, chief investment officer at PSG Wealth, noted investors are likely readying themselves for 2020, with trading "languid" ahead of Christmas next week.
The FTSE 100 index was just 2.53 points lower at 7,571.29.
The mid-cap FTSE 250 index was up 5.65 points at 21,671.79, and the AIM All-Share index was 0.1% higher at 939.57.
The Cboe UK 100 index was down 0.1% at 12,820.7. The Cboe 250 was 0.1% higher at 19,576.94, and the Cboe Small Companies was flat at 12,001.27.
In mainland Europe, the CAC 40 in Paris was up 0.1% and the DAX 30 in Frankfurt flat.
On the LSE, Royal Dutch Shell's shares slipped as it guided for a potential major impairment based on "the macro outlook". Shell's 'A' shares were down 0.8%, as were 'B' shares.
Shell is to book a post-tax impairment of USD1.7 billion to USD2.3 billion for the fourth-quarter of 2019, based on macroeconomic conditions, without giving any further details.
The oil major, London's largest listed company by market capitalisation, also guided for a number of other charges which are set to hit fourth-quarter earnings.
In the Upstream unit, Shell will book USD100 million to USD200 million charges related to well write-offs, as well as a USD500 million to USD600 million deferred tax charge.
Production in the segment for the last quarter of 2019 is guided between 2.78 million and 2.83 million barrels of oil equivalent per day. Production in all of 2018 was around 2.7 million barrels a day.
Shell said refining margins in the Downstream business are still weak, due to weak macroeconomic conditions, with marketing margins to be lower due to seasonal trends. Trading performance in Integrated Gas in the last quarter of 2019 is expected to be "average", and in line with 2019's second quarter.
Pharmaceutical company AstraZeneca was 0.5% higher. The firm announced the USD181 million sale of the rights to Arimidex and Casodex in Europe, Africa and certain other countries.
The drugs, which are mainly used to treat breast and prostate cancer, have been sold to Juvise Pharmaceuticals. AstraZeneca sold the rights to the drugs in the US in 2017.
The big winner elsewhere on the London Main Market was waste-to-product business Renewi. The company rose 22%, saying it is "delighted" with a Dutch government decision to lift a ban on thermally treated soil, following a period of testing.
Renewi said its ATM facility in the country has a "strong" pipeline of customers who plan to use thermally treated soil at their locations.
The Bank of England was another focus for the London market early Friday.
Andrew Bailey, the head of the Financial Conduct Authority, is set to be announced as the next governor of the Bank of England, the Financial Times reported. The newspaper said the selection of Bailey, former deputy governor of the Bank, could be announced by Chancellor Sajid Javid as early as Friday.
The next governor is due to start in early February, after incumbent Mark Carney steps down on January 31. Carney took up the post in July 2013 and extended his tenure twice. He said in 2016 he would stay for an extra year after his tenure ended – until June 2018 – but was then persuaded by then-chancellor Philip Hammond to extend his term by another seven months to help ease disruption from Brexit at a critical time.
In the US on Thursday, Wall Street ended in the green, with the Dow Jones Industrial Average closing 0.5% higher, the S&P 500 also 0.5% higher, and the Nasdaq Composite up 0.7%.
US Treasury Secretary Steven Mnuchin said Thursday he had no doubt Washington and Beijing will sign a new partial trade agreement next month, marking a truce after nearly two years of conflict.
"I'm very confident," Mnuchin told CNBC.
"It's just going through what I would consider to be a technical legal scrub and we'll be releasing the document and signing it in the beginning of January," he said in an interview on the White House lawn.
The Japanese Nikkei 225 index closed down 0.2% Friday. In China, the Shanghai Composite finished down 0.4%, while the Hang Seng index in Hong Kong ended 0.3% higher.
Japan's consumer prices were up 0.5% from a year earlier in November, the government said on Friday. In October, prices were up 0.2% year-on-year. The latest figure remained far off the 2% inflation goal set by the Bank of Japan more than six years ago when it launched a monetary easing campaign.
Friday's economic calendar has final third-quarter GDP readings from the UK and US at 0930 GMT and 1330 GMT respectively.
In addition, there are US personal consumption expenditure figures due at 1330 GMT - the core reading is the US Federal Reserve's preferred gauge of inflation.
By George Collard; georgecollard@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
Astrazeneca (AZN)
Renewi Plc (RWI)