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UK shares dip on BG slide, bucking European trend
October 31, 2012 / 12:35 PM / in 5 years

UK shares dip on BG slide, bucking European trend

* FTSE 100 down 0.1 percent
    * BG takes 34 points off index on production outlook
    * IAG, Antofagasta among gainers on earnings reports

    By Alistair Smout
    LONDON, Oct 31 (Reuters) - UK shares fell on Wednesday after
a mixed bag of earnings reports, weighed down by a forecast of
no growth in production next year from BG Group.
    The oil and gas firm's stock slid 20 percent in heavy volume
of eight times its 90-day average, taking 34.2 points off the
FTSE 100 - enough to turn the blue chip index negative
and buck a generally firmer tone in Europe.
    Although its results, released a day earlier than markets
expected, were slightly better than consensus estimates,
investors focused on the weak outlook.
    "The company has confirmed that production in 2013 would now
be in line with this year, clearly tempering market
expectations," said Sam Wahab, Oil & Gas Research analyst at
Seymour Pierce. 
    "Given that production in 2012 is expected to be only three
per cent higher than 2011, this is not the long-term growth
story BG's investors have become accustomed to." 
    The blue-chip index was down 0.1 percent, or 6 points, at
5,843.74 by 1140 GMT, with the majority of stocks gaining on
more encouraging earnings reports.  
    IAG was among the top gainers, adding 2.7 percent
with traders highlighting estimate-beating quarterly profits and
strong summer passenger traffic from airline Air France-KLM
. 
    German peer Lufthansa contributed to the sector
lift by beating third-quarter revenue estimates. 
    Chilean miner Antofagasta rose 1.1 percent after it said
third-quarter copper output rose almost 9 percent.
 
    Barclays shed 3.4 percent after its third-quarter
profits fell by a fifth due to charges for mis-selling of
insurance. The bank also said that U.S. authorities had opened
two new investigations against it. 
    Beyond earnings, Tullow Oil added to gains earlier
in the session after confirming the oil group had made a
discovery in its Twiga block in Kenya. Shares in the company
rose 3.4 percent. 
    Trading volumes appeared to be recovering after two days of
suppressed activity due to the closure of U.S. markets as a huge
storm battered New York. Wall Street was set to reopen on
Wednesday and the FTSE 100 was trading at 37 percent of its
90-day average at 1130 GMT.  

 (Additional reporting by Francesco Canepa; Editing by John
Stonestreet)

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