FTSE 100 Live 18 November: Royal Mail special dividend after shopping boom, oil price falls on strategic petroleum reserve plan by US China

Brent crude dipped below $80 a barrel and shares in London’s oil giants have fallen after China and the US launched an unprecedented joint effort to tame inflation.

Days after discussions between Xi Jinping and Joe Biden at a virtual summit, China signalled it planned to release oil from its strategic reserves in an effort to cool energy prices.

The move represents a win for the White House after it lobbied for major oil consuming nations to use some of their stockpiles in response to the failure of the Opec cartel and its allies to pump more crude.

Oil prices have jumped more than 50% this year, sending gasoline prices to near record levels in some parts of the US and also jeopardising the country’s pandemic recovery after inflation this month spiked at 6.2%.

The pressure on the oil industry caused Brent crude to fall to a six-week low at below $80 a barrel, while shares in the oil giants BP and Royal Dutch Shell were 2% lower.

Their declines ensured the FTSE 100 index fell 6.83 points to 7284.31 as London continued its run of underperformance against markets in Europe, where the Cac40 and Dax have hit record highs despite fears over rising Covid-19 case numbers on the continent.

Housebuilders offered some support to the top flight after FTSE 250-listed firm Crest Nicholson said its profits will be “marginally” ahead of the £101.2 million forecast.

The latest positive update from the industry pushed Persimmon and Taylor Wimpey to the front of the blue-chip risers board, up 84p and 4.5p to 2774p and 157.4p respectively.

It was a mixed session for the FTSE 100-listed safety technology company Halma after it increased its interim dividend by another 7% to a record 7.35p a share.

The shares have risen 30% so far this year and initially added 1% to a new all-time high before succumbing to results-day profit taking to stand 2% or 71p cheaper at 3055p.

The 3% rise for Crest Nicholson made it one of the biggest risers in the FTSE 250 as the second tier easily outperformed the top flight by climbing 91.35 points to 23,525.12.

Sentiment also continued to improve towards Wagamama business Restaurant Group after its shares added another 6% or 5.1p to 93.4p.

Energy network operator National Grid has seen its half-year profits soar as it benefits from a new undersea cable from France delivering renewable electricity.

National Grid saw pre-tax profits jump 86% to £1 billion in the six months to 30 September. The figure was flattered by the £7.8 billion acquisition of Western Power Distribution. The deal closed earlier this year, meaning numbers were included in financial reports for the first time. Stripping out this impact, comparable profits still rose by 24%.

Chief executive John Pettigrew said the performance was driven by a “strong contribution” from a new interconnector to France that came online during the period.

Interconnectors are undersea cables that link Britain’s electricity network with neighboring countries, allowing them to deliver renewably generated electricity. National Grid recently completed work on another £620 million interconnector with Norway.

Profits were also boosted by a revival in demand for electricity and the fading impact of Covid-19.

Royal Mail revenues raced past £6 billion in the last six months as the online shopping boom continued to transform the formerly struggling business.

Lockdown was good for the Royal Mail, as posties became one of the heroes of the pandemic.

While the letters arm remains in structural decline – it is down 60% since 2004 – even that saw some resurgence as families unable to see each other sought other ways to stay in touch.

Royal Mail is paying a divi of 6.7p a share and another £200 million special dividend. There’s also a £200 million buyback to please investors.

The dividend payments are worth £240 to staff if they hold on to the 913 shares they got when the company went public. They will get the cheque on January 12.

Shares in troubled lender Metro Bank have sunk after private equity company Carlyle pulled out of takeover talks.

Carlyle said in a brief statement that it had pulled the plug on talks that began at the start of the month. Metro Bank said it “continues to strongly believe in the standalone strategy and future prospects of Metro Bank.”

Shares are down 23.7p, or 17.9%, at 108.6p.

Ian Gordon at Investec says: “We are not unduly surprised. We see the main obstacle to a viable transaction as Metro’s high fixed cost base, largely a function of expensive long leases on its network of 78 stores which suggests (to us) limited strategic flexibility for Metro either on a standalone basis, or in the hands of any would-be third party acquire.”

Jordan, the Irish tycoon who made his name with Formula 1, said in a brief statement that a consortium led by himself and gambling industry veteran Keith O’Loughlin were “evaluating making a competing offer” for Playtech.

Playtech said Jordan and O’Loughlin had lined up potential financing from New York leveraged buyout firm Centerbridge Partners. The pair are currently doing due diligence on Playtech. Talks are at an “early stage and ongoing.”

Shares in Playtech rose 21.8p, 2.9%, to 762.8p.

The FTSE 250 firm, which plans to raise the money via a share placing and retail offer, gave the update as chief executive Andrew Jones predicted high business need for storage and distribution properties would last beyond the pandemic.

The group intends to use the raise to “fund a programme of acquisitions and developments that are either committed or under offer”.

FTSE 250 housebuilder Crest Nicholson has cheered “robust” sales rates, as high demand for properties seen during the pandemic looks to remain in place.

Numerous builders have benefited from people reassessing housing needs during lockdowns, with many seeking more space for home working.

In the year to October 2021 Crest Nicholson’s pre-tax profits will be “marginally” ahead of the £101.2 million analysts had expected.

Shares in the firm gained 8.8p to 342.8p.

The FTSE 100 index is 22.38 points lower at 7269.66, driven by falls of almost 2% for BP and Royal Dutch Shell.

Their weakness reflects a decline in oil prices after the Biden administration reportedly called for major oil consuming nations to release some of their strategic reserves.

Royal Mail shares surged 5%, up 20.7p to 458.7p, after its half-year results included a £200 million special dividend as part of plans to return £400 million to shareholders.

There was also a rise of 24p to 3150p for FTSE 100-listed safety technology company Halma as it increased its interim dividend by another 7% to a record 7.35p a share.

Outside the top flight, shares in engineeing firm Rotork fell 9% after it highlighted supply chain difficulties and Metro Bank slumped 21% as it emerged that private equity firm Carlyle had ended its takeover interest.