Shell's cash flow disappointment drags FTSE down

By Julien Ponthus and Helen Reid

LONDON (Reuters) - Britain's FTSE was flat on Wednesday, failing to ride a timid bounce by European shares as a missed cash flow forecast from Royal Dutch Shell (RDSa.L) disappointed investors and weighed heavily on the blue chip index .

The FTSE (.FTSE) was flat at 0904 GMT, slightly below the broader European market boosted by encouraging corporate results at the exception of Germany's DAX (.GDAXI), which suffered from airline Lufthansa's weak earnings.

Despite a 42 percent rise in first-quarter profit on stronger oil price, shares in Shell, a FTSE heavyweight, fell 2.9 percent as cash flows fell short of investors' strong expectations.

"The focus for the big oils in recent months has been the return to free cash flow, particularly given how strong Q1 (first quarter) normally is seasonally for the group," analysts at Barclays said ahead of the open, expecting a negative share reaction.

The disappointment didn't rub off on rival BP (BP.L), which rose 0.7 percent after it announced that Helge Lund, a former head of Norway's Statoil would be its next chairman.

Basic materials were also a drag for the FTSE, with Antofagasta (ANTO.L), Fresnillo (FRES.L) and Glencore (GLEN.L) down between 2 and 3 percent as metal prices declined.

There was also some disappointment regarding the earnings at Barclays (BARC.L), which despite better than expected first quarter pretax profit, was only up 0.3 percent as fines and legal costs from historic misconduct issues marred the bigger picture.

On the other hand, Britain's biggest pizza delivery firm Domino's Pizza Group (DOM.L) saw its shares rise 3.5 percent after first-quarter sales rose 18.3 percent with strong trading around the New Year and Easter and online orders.

(Editing by Matthew Mpoke Bigg)