Bad day for BG Group and Barclays helps send FTSE 100 into the red

UK shares fell yesterday, ending the month on a down note as a string of gloomy earnings and outlooks from firms such as Barclays and GlaxoSmithKline weighed on sentiment.

The FTSE 100 was down 1.2 per cent, or 67 points, at 5,782.70 at the close, more than shedding the previous session’s gains, led down by a forecast of no growth in production next year from BG Group.

The oil and gas firm’s stock slid 13.7 per cent in heavy volume of 16 times its 90-day average, taking 24 points off the FTSE 100. Although the results came in ahead of consensus estimates, the company saw a weaker outlook.

BG’s results are an example of a broader trend where beating expected earnings is not enough to satisfy the markets.

“Earnings estimates have come down 14 per cent this year, so all the earnings growth that you were supposed to be generating in stocks this year is gone,” said Mike Ingram at BGC Partners.

Several heavyweight firms who missed estimated results yesterday also saw bleak outlooks in the near future. Barclays shed 4.7 per cent after its third-quarter profits fell by a fifth due to charges for mis-selling insurance. The bank also said that US authorities had opened two new investigations against it.

Pharmaceutical company GlaxoSmithKline lost 2.4 per cent after posting a fourth consecutive quarter in which Britain's biggest drugmaker missed sales and earnings expectations.