FTSE 100 edges higher after initial dip, with Royal Dutch Shell PLC lifted by restructuring plans

• FTSE 100 up 7 points
• AstraZeneca recovers some ground
• Avast boosted by deal update

9.25am: Leading shares see a turnaround

After an initial dip, leading shares are now edging higher.

The FTSE 100 is up 7.67 points or 0.1% at 7355.58 but the mood remains cautious.

Royal Dutch Shell PLC (A shares) (LSE:RDSA) continues to provide support, up 2.19%, while Royal Dutch Shell PLC (LSE:RDSB) has added 1.7%.

The oil giant plans to simplify its two classes of share into one and unify its tax residence in the UK. This means that under Dutch rules it can no longer be called “Royal”.

So Shell PLC it will become.

Laura Hoy, equity analyst at Hargreaves Lansdown, said: “Aside from the fact that the shares they hold will no longer come with a ‘Royal’ designation, this new alignment won’t change much for investors. The long-term growth story for Shell still rests heavily on the oil price

“For now, buoyant oil prices are keeping the group’s cash coffers topped up, which has had a positive impact on debt and given the group the means to boost shareholder returns. However, with the inevitable shift to more sustainable energy picking up steam we suspect the need to invest in greener operations will keep a lid on what the group can pass on to shareholders.”

8.33am: Avast leads FTSE 100 risers

Cyber security firm Avast PLC (LSE:AVST) is the biggest riser in the leading index, as its effective takeover by NortonLifeLock came a step closer.

A US regulatory hurdle has been cleared as of last Friday, and the deal now needs to be approved by Avast’s shareholders on 18 November.

Avast has added 5.76% to 591p.

8.25am: Cautious start to trading

Leading shares have made a cautious start ahead of a reasonably busy week in terms of corporate news and economic data, including the UK consumer price index and retail sales.

With inflation worries still close to the surface, the FTSE 100 has dipped 2.16 points to 7345.75.

There are also some geopolitical concerns, not least the outcome of the virtual meeting between US President Biden and Chinese President Xi later today.

Closer to home, speculation continues about whether the UK could cause further confrontation with the European Union by triggering Article 16 of the Northern Ireland Protocol, even if tensions have eased a little in the last few days.

Investors will also be watching for any indication about potential new leadership at the US central bank.

Jim Reid at Deutsche Bank said: “The main focus for investors will be the speculation about who might be the next Fed Chair, particularly in light of the news out last week that both incumbent Fed Chair [Jerome] Powell and Governor Brainard had been interviewed for the position.

“Powell’s current four-year term comes to an end in February, and whoever’s nominated would require senate confirmation for another term. At this point 4, 8 and 12 years ago, the announcement of who’d be nominated had already been made, but we still don’t have a date for when we might get the news. However, it may not be too far away, with President Biden saying in Glasgow on November 2 that it would be “fairly quickly”.

Back with the FTSE 100 and Royal Dutch Shell PLC (A shares) (LSE:RDSA) is up 0.82% as the oil giant makes plans to simplify its complicated share structure.

AstraZeneca PLC (LSE:AZN), which fell sharply on Friday following its results, has recovered 1.19%.

6.50am: Quiet open expected as traders take stock

The FTSE 100 looks set for a quiet start to the trading week, mirroring Asia’s main markets.

There were two rare pieces of upbeat economic news from China earlier – industrial output and retails sales beat market expectations. However, this was counterbalanced by a fall in new home prices.

After a record week for the US, French and German markets, it appears Monday will be used by traders to take stock.

And of course, the threat of rising prices – and the knock-on impact on monetary policy – will continue to be a hot topic for debate this week, as it has been for months now.

“As we look towards another week the inflation genie has so far been the dog that hasn’t barked, however, the volume over the apparent lack of urgency to rising inflation risks from central banks has been getting louder in the past few weeks,” said Michael Hewson of CMC Markets.

“While those who are saying that central banks can’t do much about supply chain disruptions and shortages of products, and as such should look through the sharp rises in prices, are undoubtedly correct in some part, that view entirely misses the very real point that monetary policy could well be exacerbating some of this upward pressure in prices.

“As such, there is scope for central banks to move monetary policy off their current emergency settings without it causing too much disruption.

“For the moment, the two sides of the argument appear to be split between benign neglect, and a sharp tightening of policy to head off inflation risk when it comes to policy settings. There is a middle ground and central bankers need to get off their collective backsides and take it.”

Looking ahead, it is expected to be a busy week for blue-chip news with updates from Royal Mail, Vodafone, British Land, Imperial Brands and SSE expected.

On the market

• Pound US1.3430 (+0.12%)
• Bitcoin US$65,789.40 (+0.42%)
• Gold US$1,859.60 (-0.42%)
• Brent crude US$81.67 (-0.50%)

6.50am: Early Markets – Asia / Australia

Asia-Pacific shares were mostly higher on Monday as retail sales in China gained 4.9% year-on-year in October, higher than the 3.5% lift predicted in a Reuters poll.

The country’s industrial output for the month also rose 3.5% as compared with a year ago, above expectations for a 3% increase.

China’s Shanghai Composite slipped 0.18% despite the positive news while Hong Kong’s Hang Seng index rose 0.04%

In Japan, the Nikkei 225 gained 0.55% and South Korea’s Kospi surged 1.07%.

Australia’s S&P/ASX200 lifted 0.36% to 7,470.1 points, with energy stocks the only sector finishing significantly lower.

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