Commodity stock gains help propel FTSE into the black

Royal Dutch Shell was among those making share gains on the FTSE 100 Index yesterday in a buoyant session for commodity stocks.

The market was also given a boost by positive earnings figures from companies including telecoms giant Motorola, as well as better-than-expected US unemployment data.

The Footsie closed 31.87 points higher at 5677.89, although markets on both sides of the Atlantic have had a mixed week amid speculation over the scale of possible money supply boosting measures by the US Federal Reserve next week.

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Today's third quarter GDP growth figures for the US are likely to fuel further debate over the scale of quantitative easing required to aid the recovery.

The dollar fell back against the pound and the euro after Wednesday's gains on market talk that QE in the US may be smaller than hoped.

Sterling rose to nearly $1.60.

Among stocks, Shell shares rose 9p to 1962p after higher oil prices and a 5 per cent rise in production meant profits lifted 18 per cent to $3.5bn (2.2bn) for the three months to September 30.

BP was also higher with a gain of 3.95p to 423p, while elsewhere in the resources sector BHP Billiton added 571/2p to 2221p.

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Other leading risers included mobile phone group Vodafone, which added 4.4p to 170.7p after third quarter figures posted by France Telecom showed improving mobile revenues trends.

The biggest fall of the session came from temporary power supplier Aggreko, which fell more than 4 per cent or 70p to 1592p, even though the firm lifted its full-year profits guidance.

It was joined on the way down by pharmaceuticals firm AstraZeneca, after analysts at Collins Stewart said third quarter figures were weak, with US trading particularly under pressure. Shares dropped 106p to 31391/2p.

In the FTSE 250 Index, Hovis-to-Mr Kipling firm Premier Foods posted one of the biggest falls of the session after it said sales were down by 4.2 per cent to 606m in the three months to the end of September, a period which it described as the most difficult since 2007. Shares fell 3/4p to 18p, a drop of 4 per cent.

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Outsourcing firm Mouchel saw its shares slump by nearly a third – off 38p to 88p – after it scrapped its dividend and reported a sizeable full-year loss.

Mouchel, which develops infrastructure for councils and Government agencies, experienced a drop in demand after the change of Government in May, as departments reined in spending and postponed or scaled down projects.

On a brighter note, UK Coal shares were 11/4p higher at 34p after it said output from its three deep mines was up more than 40 per cent on a year ago at 1.7 million tonnes in the third quarter.

In light of a small operating profit for the three months and a more consistent performance from its deep mines, UK Coal said it was "cautiously optimistic about the remainder of 2010 and 2011".

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Investment in new seams, stronger coal prices and the replacement of legacy contracts with new long-term supply deals have boosted the company in recent months.

The biggest Footsie risers were Schroders up 70p to 1595p, ARM Holdings ahead 11.6p to 372p, Standard Chartered up 50p to 1825p and Prudential ahead 17p to 6301/2p.

The four biggest Footsie fallers of the session were Aggreko down 70p to 1592p, AstraZeneca off 106p to 31391/2p, Weir Group down 45p to 1535p and Smith & Nephew which closed 131/2p lower at 560p.