London open: FTSE edges up as Rolls-Royce, BAE upgrade guidance; BoE in focus

(Sharecast News) - London stocks ticked up in early trade on Thursday despite heavy losses on Wall Street, as guidance upgrades from Rolls-Royce and BAE Systems and a well-received update from Shell lent a hand, with all eyes on the upcoming Bank of England policy announcement.

At 0850 BST, the FTSE 100 was up 0.2% at 10,926.42, faring well given sharply lower opening calls.

Stocks in the US tumbled after the Federal Reserve kept the funds rate unchanged at 3.5% to 3.75%, as expected, but with three policymakers having voted for a 25 basis points hike, raising speculation about a potential increase in July.

On home shores, meanwhile, the Bank of England was widely expected to leave Bank Rate unchanged at 3.75% when it makes its policy announcement at midday.

TD Securities said the base case is for the Monetary Policy Committee to vote 7-2 in favour of leaving rates unchanged, with Greene and Pill once again dissenting for a hike. It expects there to be very little change in the message, as uncertainty in the Middle East continues to be the main concern in balancing the risks to inflation, despite the loosening labour market.

TD said the seven members voting for a hold are likely to continue "to emphasise patience in waiting for evidence of second-round effects before moving off the perch, but shift any explicit mention of underlying disinflation to a tone of vigilance once more".

In commodities, oil prices remained higher, with Brent crude up 2.3% at $92.78 a barrel and West Texas Intermediate 1.6% higher at $85.85 as the US carried out strikes on Iran after Trump warned it would be hit "hard" following a "surprise attack" on American bases in the Middle East.

In equity markets, investors were wading through a deluge of earnings releases.

Rolls-Royce rallied as it lifted its full-year profit guidance following a strong first half. It now expects �4.7bn to �4.9bn in underlying operating profits and �3.8bn to �4bn of free cash flow, up from previous ranges of �4.0bn to �4.2bn and �3.6bn to �3.8bn, respectively.

BAE Systems was also higher as it upgraded full-year guidance and reported a jump in first-half profit as governments ramped up defence investments.

BAE now expects sales to grow between 8% and 10%, up from previous guidance for 7% to 9% growth. Underlying EBIT is expected to rise by 10% to 12%, versus previous guidance of 9% to 11%, and underlying earnings per share are seen up by 11% to 13%, compared to previous guidance for growth of between 9% and 11%.

The free cash flow target was lifted to more than �2bn from more than �1.3bn and the company's target for cumulative free cash flow between 2024 and 2026 was increased to more than �6.7bn, from more than �6bn.

Shell gushed higher as the energy major launched a $3bn share buyback after more than doubling profits in the second quarter as oil prices soared and upstream production hit record levels in Brazil. The company reported adjusted earnings of $9.84bn for the three months to 30 June, ahead of the $6.92bn recorded in the first quarter and the $4.26bn reported the year before.

This was the oil giant's best quarterly performance since the second quarter of 2022. Analysts had expected a figure closer to $8.79bn.

Lloyds Banking Group also gained as it held annual guidance after a 23% jump in half-year profits driven by higher net interest income and announced a �1bn share buyback.

Mondi advanced after half-year results, but Rentokil tumbled on the back of first-half numbers.

Market Movers

FTSE 100 (UKX) 10,926.42 0.17%

FTSE 250 (MCX) 23,996.70 0.00%

techMARK (TASX) 6,116.16 -0.37%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 1,420.20p 4.25%

Rio Tinto (RIO) 7,116.00p 2.45%

BAE Systems (BA.) 2,038.00p 1.93%

Shell (SHEL) 3,364.50p 1.72%

Investec (INVP) 638.50p 1.59%

Fresnillo (FRES) 2,517.00p 1.49%

Antofagasta (ANTO) 3,565.00p 1.38%

Informa (INF) 913.40p 1.32%

Anglo American (AAL) 3,630.00p 1.22%

Babcock International Group (BAB) 1,142.00p 1.14%

FTSE 100 - Fallers

Rentokil Initial (RTO) 369.10p -15.66%

The Sage Group (SGE) 986.60p -3.21%

JD Sports Fashion (JD.) 92.28p -2.53%

London Stock Exchange Group (LSEG) 8,940.00p -2.50%

Haleon (HLN) 371.30p -2.00%

Flutter Entertainment (DI) (FLTR) 8,046.00p -1.80%

Relx plc (REL) 2,818.00p -1.53%

Metlen Energy & Metals (MTLN) 44.67p -1.32%

Pearson (PSON) 1,306.00p -1.28%

Games Workshop Group (GAW) 19,580.00p -1.21%

FTSE 250 - Risers

Mondi (MNDI) 866.80p 9.88%

Ceres Power Holdings (CWR) 315.40p 3.85%

Elementis (ELM) 181.80p 3.43%

Kier Group (KIE) 241.20p 2.99%

Keller Group (KLR) 3,054.00p 2.34%

XP Power Ltd. (DI) (XPP) 1,602.00p 2.04%

Vesuvius (VSVS) 371.40p 2.03%

Pollen Street Group Limited (POLN) 877.00p 1.98%

Bloomsbury Publishing (BMY) 650.00p 1.88%

Rosebank Industries NPV (ROSE) 330.00p 1.85%

FTSE 250 - Fallers

Wickes Group (WIX) 196.20p -3.36%

Mony Group (MONY) 207.60p -3.29%

Hays (HAS) 62.85p -3.02%

Henderson Far East Income Ltd. (HFEL) 248.50p -2.74%

Hansa Investment Company Limited (DI) (HAN) 326.00p -2.40%

Kainos Group (KNOS) 907.00p -2.26%

Trustpilot Group (TRST) 271.80p -2.01%

WPP (WPP) 313.60p -1.89%

Baillie Gifford Japan Trust (BGFD) 988.00p -1.69%

B&M European Value Retail (BME) 226.80p -1.65%