BRITAIN'S leading share index ended virtually unchanged yesterday as forecast-beating results from BP and Royal Dutch Shell offset weakness in miners and banks.
The FTSE 100 index closed down a single point at 6,089.4, after trading as much as 4
0 points higher earlier in the session.
Peter Dixon, UK economist at Commerzbank, said: "With consumer confidence dipping, it is a pretty solid indication that in the next few months US consumers are going to find it much more difficult to drive growth. That obviously is going to knock back on earnings."
Confidence among US consumers fell to a five-year low in April as they confronted the grimmest jobs outlook since late 2004.
"We are going to get worse economic data and earnings in the next few quarters and consequently I would expect equity markets to retrack recent gains," Dixon said.
But all eyes will be on the Federal Reserve's rate decision, due today, and US non-farm payrolls data on Friday, he added.
BP and Shell dominated the risers' board on the Footsie as they announced combined profits of more than £7 billion in the first three months of the year alone.
BP set the pace, adding 6 per cent, or 34p, to 613p after it unveiled a 48 per cent rise in profits for the period. Rival Shell, which posted a 12 per cent rise in profits to $7.7bn (£3.9bn), followed with a 6 per cent gain, up 112p to 2,035p.
Gas exploration firm BG Group was also high up the leaders' board, gaining 10p to 1,308p.
Shares in Britain's biggest mortgage lender, HBOS, dropped 2 per cent as investors digested the news of a £4bn rights issue from the group. Broker Collins Stewart told clients to sell the stock, and the shares dropped 9p to 486.75p.
Barclays, another said to be in line for a capital-raising move, was also on the back foot, off 10.5p to 460p.
HSBC stayed in the black, gaining 6p to 871p, as the City noted good results from Spanish-owned Abbey.
Another mover was Friends Provident after the insurer said first-quarter sales rose 11 per cent and added that it had faith in its new strategy.
The fading of takeover interest has put Friends Provident shares under pressure recently, but the stock rose 1p to 118.2p yesterday.
Falling metals prices saw shares in the big mining companies dominate the fallers' board. Kazakhmys lost 77p to 1,648p, with Rio Tinto down 216p at 6,010p and Anglo American 92p worse off at 3,249p.
In the FTSE 250 index, pub chain JD Wetherspoon rose 2 per cent or 4p to 273p, after reporting an improved trend for sales. Market research group Taylor Nelson Sofres was the biggest gainer, up 19 per cent or 33p to 204p, after confirming it was in merger talks with rival GfK.
DOW JONES 12,847.2 -24.59US SHARES declined yesterday after regulators rejected a key new drug from Merck, a Dow component and a pharmaceuticals bellwether, and a survey showed a sharp drop in consumer confidence.
Merck's 10 per cent slide hurt both the Dow and the S&P 500, a day after the company said the US Food and Drug Administration had spurned its new drug, Cordaptive, aimed to raise the level of HDL or "good" cholesterol. Several brokerages cut price targets on the stock.
The latest data increased investors' fears of recession, with consumer confidence hitting a five-year low in April, as well as signs that more US homeowners are falling behind in their mortgage payments and foreclosures are rising.
With fears of recession mounting, the Federal Reserve's comments on the economy took on particular urgency. The Fed is set to make a decision on interest rates today.
