Shell 'miscalculation' pulls FTSE under 4400 barrier

The FTSE 100 closed down under the psychological 4400 mark barrier, having lost 58.9 points or 1.32%, at 4,397.9, after Shell has been forced to admit, for the second time this year, it had overestimated its reserves.

Shell Transport & Trading – which is 40% owned by Shell – eventually closed down 11p or 2.96% to 361p after a spokesman for the firm stated its proven 2002 reserves have been cut by an amount equal to 250m barrels of oil, beyond the 3.9bn barrel reduction announced on January 9th.

Mining giant Rio Tinto has also had a tough day and closed down 34p or 2.47% to £13.44 as the firm has yet to assess just how much production was lost after a cyclone disrupted Western Australian operations.

British Airways suffered another tortuous day and fell another 13p or 4.48% to 277p on the back of worries about potential loss of revenue if tourism continues to slow amid terrorism fears.

Prudential also lost 17.5p or 3.74% to 450.25p and Royal & SunAlliance dropped 3.5p or 4.05% to 83p while Whitbread ended down 23p or 3.17% to 701.5p.

Part of the pressure in the US stock markets is the result of another drop in the dollar’s value, as the dollar earlier today fell to 106.45 yen, after the Japanese finance minister said – for the third day in a row – he may have to scale back currency sales.

The dollar was earlier down 1.5 cents to $1.2404 against the euro, driving the Dow Jones index down 64.45 points or 0.63% to almost 10,236.

The Nasdaq Composite index was also down around 24.2 points or 1.22% to 1,952.5 after close of play in London while the S&P 500 index dropped almost 8 points or 0.7% to 1,115.

IFAonline

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