The top British stock market index fell on Thursday after Royal Dutch Shell’s historic dividend cut and Lloyds Banking Group announced big loan-loss provisions.
The FTSE 100 UKX, -3.50% fell 0.6% to 6078.16.
“Hopes of further gains for the FTSE 100 after yesterday’s solid push through 6000 have been dashed for now thanks to Shell’s decision to cut its dividend, along with disappointing performances for Lloyds and mining stocks that, taken together, have pushed the index into the red in early trading,” said Chris Beauchamp, chief market analyst at IG.
Royal Dutch Shell RDSA, -10.82% fell 6% after announcing it was cutting its first-quarter dividend by two-thirds, in what was reported to be the first time the Anglo-Dutch oil giant had reduced its dividend in 80 years.
The Shell move contrasts with BP BP, -6.11%, which maintained its dividend.
Lloyds Banking Group LLOY, -7.25% slumped 4% after taking 1.4 billion pounds of provisions to cover loan losses stemming from COVID-19. “Given the economic outlook we will inevitably be impacted both within the existing book and potentially in the new lending we are undertaking to support our customers,” the bank said.
AstraZeneca AZN, +1.40% climbed over 3% after reaching an agreement with the University of Oxford to partner on a COVID-19 vaccine. Under the agreement, AstraZeneca would be responsible for development and worldwide manufacturing and distribution of the vaccine.