The FTSE 100 fell 3.5% in early trade, largely due to Shell’s 3.3% decline on a disappointing earnings report.
The oil and gas supermajor was the heaviest faller among the blue chips, dropping 3.5% after its Q4 results failed to meet expectations.
Shell said that its 2010 earnings were US$18.6 billion compared to $9.8 billion a year ago and fourth quarter earnings rose from US$1.2 billion a year earlier to US$5.7 billion.
Clothing retailer Next (LON:NXT) and software company Sage Group (LON:SGE) followed, shedding nearly 2%.
Telecom group BT (LON:BT.A) was among the top risers after reporting that pre-tax profits jumped 30% to £531 million in the third quarter.
Temporary power provider Aggreko (LON:AGK) and chipmaker ARM Holdings (LON:ARM) also did well, climbing 3.6% and 2.7% respectively.
Elsewhere in Europe, France’s CAC 40 fell 1.1%, Spain’s IBEX 35 dropped 1.2% and Germany’s DAX declined marginally.
Japan’s Nikkei 225 shed 0.25% and Australia’s S&P/ASX 200 added 0.5%.
US stocks are set for a flat start ahead of today’s macroeconomic data, which will include US jobless claims, factory orders and the ISM (Institute for Supply Management) non-manufacturing index.
Futures for the Dow Jones Industrial Average (DJIA) and the S&P 500 index rose marginally, while NASDAQ futures shed 0.1%.
VISA (NYSE:V) reported a 16% jump in first quarter profits and reaffirmed its financial outlook for the current year. Rival credit card service company Mastercard (NYSE:MA) will report its earnings today along with New York Times (NYSE:NYT), food processing company Kellogg (NYSE:K) and pharmaceutical major Merck (NYSE:MRK).