London midday: FTSE maintains gains as Shell rallies

(Sharecast News) - London stocks were still in the black by midday on Thursday, with Shell pacing the gains after well-received results, as investors continued to mull the Autumn Budget and looked ahead to the latest policy announcement form the European Central Bank.

The FTSE 100 was up 0.5% at 10,745.61.

Overnight, the Federal Reserve left policy rates unchanged at between 3.75% and 4.00%, as expected, with Hammack and Cook dissenting and favouring a 25 basis points hike.

Russ Mould, investment director at AJ Bell, said: "Buoyed by strong corporate results, European markets chalked up strong gains on Thursday, bucking the negative trend seen in Asia overnight.

"While the Federal Reserve decision held few surprises, US futures pointed to a weak start thanks to a poor reception for Google-owner Alphabet's earnings, announced after the market bell on Wall Street yesterday.

"The numbers have only further magnified concerns about the sustainability of the huge sums currently being spent on AI.

"Several domestic-facing stocks also made gains in London on relief that the Budget hadn't caused more of a stir, with gilt yields and sterling remaining stable in the wake of Chancellor John Healey's announcement.

"The next key test of market sentiment will come with the decision from the European Central Bank on rates later today."

The European Central Bank is expected to leave rates at 2.50% when it makes its announcement at 1315 GMT.

On home shores, figures from the Bank of England showed that mortgage approvals fell a little more than expected in September.

The latest monthly Money and Credit report showed that net mortgage approvals for house purchases declined to 53,400 from 54,800 in August. Economists were expecting a slightly smaller drop to 54,000.

Net borrowing of mortgage debt by individuals fell to £3.9bn in September from £4.2bn a month earlier, below the previous six-month average of £4.9bn.

The 'effective' interest rate - the actual interest paid - on newly-drawn mortgages rose to 4.63% from 4.60% Meanwhile, the rate on the outstanding stock of mortgages ticked up to 4.03% in September from 4.00% in August.

The report also showed that net borrowing of consumer credit by individuals fell to £1.9bn from £2.7bn in August. Within this, net borrowing through credit cards was £0.7bn in September, down from £1.3bn in August. Borrowing through other forms of consumer credit, such as car dealership finance and personal loans, declined to £1.2bn from £1.4bn.

In equity markets, Shell shot to the top of the FTSE 100 as it posted a near-doubling of its third-quarter profit, driven by record refining margins, and announced a $5bn share buyback programme.

In the three months to September end, adjusted earnings - the oil giant's measure of net profit - rose to $10.8bn from $5.4bn in the same period a year earlier. This was ahead of analysts' expectations of $10.3bn. The indicative refining margin jumped to $42 in Q3 from $24 in the second quarter.

Whitbread rallied as the Premier Inn owner welcomed Healey's Budget, saying that the freeze to business rates and a "more reasonable" increase in wages were set to have "a significant positive impact" on its performance.

Aviva was higher after an upgrade to 'overweight' from 'equalweight' at Morgan Stanley, which increased its price target to 820p from 700p.

On the downside, Haleon tumbled as the consumer healthcare firm cut its full-year organic revenue growth guidance, pointing to soft cold and flu sales in the third quarter.

St James's Place also lost ground despite saying that funds under management reached a record £242.4bn in the third quarter after another quarter of net inflows.

Lloyds Banking Group was under the cosh despite saying it was on track to meet 2026 guidance as it posted a rise in third-quarter pre-tax profit and net income that met analysts' expectations.

In the three months to September end, pre-tax profit increased to £2.3bn from £1.2bn in the same period a year earlier, versus expectations of £2.28bn. Net interest income was 10% higher at £3.8bn, in line with analysts' expectations, while net income came in at £5.1bn, up from £4.6bn and also broadly in line with expectations.

Neil Wilson, UK investor strategist at Saxo Markets, said the reaction to the results "implies investors are worried about the tax increases in the Budget and requiring a higher bar for earnings".

Mecca Bingo and Grosvenor Casino owner Rank Group fell as it said the rise in machine games duty announced in Wednesday's Budget will add around £9m in costs per year before mitigating actions.

Elsewhere, Kier and Renishaw fell as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 10,745.61 0.48%

FTSE 250 (MCX) 24,683.65 0.18%

techMARK (TASX) 6,270.91 -0.90%

FTSE 100 - Risers

Shell (SHEL) 4,067.50p 2.87%

BAE Systems (BA.) 2,084.00p 2.86%

3i Group (III) 2,405.00p 2.51%

British Land Company (BLND) 423.80p 2.02%

BP (BP.) 632.40p 2.00%

Melrose Industries (MRO) 471.70p 1.94%

ICG (ICG) 1,835.00p 1.94%

AstraZeneca (AZN) 12,982.00p 1.82%

International Consolidated Airlines Group SA (CDI) (IAG) 410.30p 1.71%

London Stock Exchange Group (LSEG) 9,332.00p 1.70%

FTSE 100 - Fallers

Haleon (HLN) 318.70p -14.60%

St James's Place (STJ) 1,038.50p -6.87%

Lloyds Banking Group (LLOY) 98.64p -5.02%

Metlen Energy & Metals (MTLN) 48.10p -2.71%

Glencore (GLEN) 529.30p -2.29%

NATWEST GROUP (NWG) 631.60p -2.29%

Computacenter (CCC) 5,170.00p -1.61%

Diageo (DGE) 1,718.50p -0.95%

Antofagasta (ANTO) 3,254.00p -0.79%

Centrica (CNA) 155.05p -0.74%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 414.60p 4.64%

Hansa Investment Company Limited (DI) (HAN) 348.00p 4.19%

Seraphim Space Investment Trust (SSIT) 188.40p 3.40%

Morgan Advanced Materials (MGAM) 266.00p 2.70%

Avon Technologies (AVON) 2,480.00p 2.27%

RHI Magnesita N.V. (DI) (RHIM) 2,715.00p 2.26%

THG (THG) 40.94p 2.19%

Taylor Wimpey (TW.) 80.10p 2.14%

Trainline (TRN) 209.40p 2.05%

Bellway (BWY) 2,172.00p 1.87%

FTSE 250 - Fallers

Rightmove (RMV) 509.00p -4.57%

Henderson Far East Income Ltd. (HFEL) 254.00p -3.61%

Rank Group (RNK) 85.20p -3.18%

Kier Group (KIE) 309.00p -2.46%

Allianz Technology Trust (ATT) 703.00p -2.23%

NCC Group (NCC) 169.60p -2.19%

Renishaw (RSW) 5,470.00p -2.15%

Shawbrook Group (SHAW) 298.75p -1.81%

Schroder Asian Total Return Investment Company (ATR) 653.00p -1.80%

Hays (HAS) 58.60p -1.68%