London open: Banks cure Shell shock

29th Oct 2009 08:34

UK blue chips continued yesterday's poor form, falling further in early deals as Shell disappointed with a 73% plunge in quarterly profits, but recovering financial plays soon erased the deficit.Royal Dutch Shell's third quarter earnings crashed to just $3bn from $10.9bn a year ago on a current cost of supplies (CCS) basis due to weaker oil and gas prices. They sank 68% to $8.6bn for the nine months."We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery," said chief executive Peter Voser. But Lloyds Banking Group attracted fans this morning. The shares have fallen recently on fears that the European Commission could penalise Lloyds and Royal Bank of Scotland for being bailed out by the UK government. Press reports today say Lloyds is sounding out investors about launching a £25bn capital raising to withdraw from the state insurance scheme for its toxic debts. Asia-focused bank Standard Chartered also cheered after it said its markets in Asia, Africa and the Middle East are pulling out of the recession quicker than many markets in the West. The group, which notched up record income and profits in the first half of the year, said it continued to make 'good progress' in the third quarter.Elsewhere, Prudential is better after some positive comment in the papers following yesterday's results. Sales fell 9% during the third quarter. Aviva and Legal & Genral are also higher.Life assurance group Standard Life saw strong growth in assets in the third quarter as the markets continued their recovery. Assets under management rose by £15.3bn in the third quarter to £136.9bn. Third party assets under management jumped to a record £54.1bn from £47.3bn at the end of June.Miners are struggling though. Kazakhmys is worst performer despite being on track to hit full year targets. It said maintenance work could hit Q4 output. Among the mid-caps, the decision by National Express to call off talks with suitor Stagecoach sent its shares tumbling. It will now focus on completing an equity fundraising by the end of this year. Stagecoach said it was disappointed.Cash-strapped Yellow Pages directory publisher Yell Group has again extended the deadline for its refinancing. The company, which is looking to restructure £3.8bn of debt, extended the deadline for the third time this week after last night's cut-off passed without success.Rail and bus group Arriva said it has continued to trade in line with expectations since August 27 with strong growth in bus operations and a continued good performance from trains.