* FTSE 100 flat
* Shell profit knocks index to underperform peers
* Miners extend bounce, up 7 percent this week
* Index set for best week of 2014
By Alistair Smout
LONDON, Jan 17 Britain's top share index
underperformed major regional peers on Friday, knocked back by a
dramatic fall in Shell, its most heavily weighted stock, after
the oil major delivered a profit warning.
Royal Dutch Shell saw its listings fall
3.1 percent and 2.8 percent respectively after it warned that
its fourth-quarter figures are expected to be significantly
lower than recent levels of profitability because of oil and gas
prices and problems with its refining business.
"It's not good. When you're talking about higher costs and
lower production volumes, it's a lethal combination," Nick
Xanders, who heads up European equity strategy at BTIG, said.
"It's symptomatic of the entire market, with costs rising
but revenues not coming through. Some hope that it's a company
specific thing, but I don't think it is."
At its peak fall, the drop knocked around 6.5 billion pounds
off Shell's market capitalisation, while the broader energy
sector wiped 26 points off the FTSE 100, enough to erase
any gains on the market.
The index was flat at 6,818.05, despite the fact that four
in five stocks were in positive territory. It underperformed
euro zone peers, with the euro zone blue-chip EuroSTOXX 50
up 0.2 percent.
Miners extended a bounce after Rio Tinto's good
results on Thursday to trade 7 percent higher so far this week.
The FTSE 100 is up 1.2 percent since Monday, set for its
biggest weekly gain of the year, after a strong rise on
Wednesday lifted the index out of a tight 100 point trading
range that had prevailed since the start of 2014.
The gains have taken the index to within a point of
October's high at 6,819, 0.8 percent off 2013's high and 2
percent off an all time high set 14 years ago.
"Wednesday's gains were held onto yesterday and we continue
to sit just below (the October high)," Clive Lambert, analyst at
FuturesTech, said in a note.
"Taking out last year's highs and gunning for the late 1999
all-time high must be in bulls' thoughts now."