* FTSE 100 flat as Ukraine violence caps sentiment
* Shell boosted by strong cash flow numbers
* Rolls-Royce rises on Siemens disposal talks
By Francesco Canepa
LONDON, April 30 An escalation of violence in
Ukraine put a lid on British blue chips on Wednesday, offsetting
sharp gains in the energy sector, where results for oil major
Royal Dutch Shell beat expectations.
Pro-Russian separatists seized control of state buildings in
the town of Horlivka, tightening their grip on swathes of
Ukraine's industrial east, in a major escalation of their revolt
despite new Western sanctions on Russia.
While Britain's top 100 companies make only 0.3 percent of
their sales to eastern Europe, Thomson Reuters Datastream shows,
tensions between Russia and the West and the prospect of costly
sanctions dented appetite for assets which depend on economic
growth, such as shares.
"Positive corporate and economic data in recent weeks have
unfortunately more or less been neutralised by the events
unfolding in Ukraine. For now we are looking to sell into
rallies and to buy on weakness," Peregrine & Black senior sales
trader Markus Huber said.
Britain's FTSE was flat at 6,771.60 points at 0755
GMT after recording its highest close since March 6 on Tuesday.
"News isn't too bad this morning but we are close to hitting
the upper trading ranges again (so) we call for caution at this
stage," Huber said.
Shell's two FTSE listings added a combined 24 points to the
index after the oil group reported an increase in cash flow in
the first quarter of the year, allowing it to increase its
dividend by 4 percent year on year.
"Shell significantly beat our expectations," RBC Capital
Markets analysts wrote in a note. "Quarterly cash flows are very
volatile, but we regard this level as encouraging."
Also in the energy sector, gas group BG Group rose
1.3 percent on speculation, fuelled by a report in the Financial
Times, that BHP Billiton might make a bid. The mining
group's shares were flat.
"I think the market is taking more notice of these rumours
at the moment," Galvan head of trading Ed Woolfitt said. "I'm
nor entirely sure about it ... as a deal but with a lot of the
recent moves on rumours I shall certainly be trading on it."
Mergers and acquisition activity has been a major driver
behind a 4-percent rise in the FTSE over the past two weeks.
Industrial group Rolls-Royce rose 2.2 percent after
entering talks with Germany's Siemens AG to sell a
unit that makes equipment for the oil and gas industry and
power-generation gear for utilities.
Curbing gains on the FTSE was financial services group
Standard Life Plc, down 3 percent after saying a move by
the British government to liberalise how retirees use their
pension pots prompted a 50-percent fall in its annuities after
the move was announced in March.
British American Tobacco also fell, trading down
0.8 percent, as it recorded a 12-percent drop in quarterly
revenue, which it blamed on adverse foreign exchange moves.
Excluding the impact of exchange rates, revenue rose 2 percent.
Nine blue chips, including supermarket Tesco traded
ex-dividend, knocking a combined 6.53 points off the FTSE.
(Editing by Louise Ireland)