London open: FTSE falls ahead of BoE, ECB; Shell results in focus

(Sharecast News) - London stocks fell in early trade on Thursday following a record close, as investors mulled results from the likes of Shell and Vodafone, ahead of the latest policy announcements from the Bank of England and the European Central Bank.

At 0825 GMT, the FTSE 100 was down 0.2% at 10,382.71, having breached 10,400 for the first time on Wednesday.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "The FTSE has opened down this morning. Central bank policy and commentary could provide some direction later on, with rate decisions due from both the Bank of England (BoE) and European Central Bank (ECB). There are no changes expected to be announced in either London or Frankfurt.

"The ECB's followed a steeper easing slope with rates now stable at 2.0% since June last year. With yesterday's Eurozone inflation figure of 1.7% coming in way below target, there may be some growing calls for a further drop in borrowing rates. That could go some way towards halting the Euro's ascendancy against the dollar, providing some much-needed relief for exporters.

"Recent BoE votes have been far more tense than the relative unity seen by European rate setters. Once again, today's vote split will provide vital clues around the likely direction of travel. A surprise uptick in December's inflation to 3.4% was a timely reminder of the tightrope being walked by UK policymakers. With unemployment of 5.1% at the highest level since April 2021, both equity investors and job seekers will be hoping for more than just one quarter-point cut this year. But with inflation not yet slain, that's far from a done deal."

In equity markets, Shell fell as it posted a slide in quarterly earnings after lower prices and a rise in operating expenses weighed heavily. Income attributable to shareholders was $4.1bn in the final three months of 2025, a 22% drop on the third quarter.

Adjusted earnings tumbled 40% to $3.3bn. In the fourth quarter of 2024, adjusted earnings were $3.7bn.

Shell blamed the decline on "unfavourable tax movements...lower marketing margins, lower realised prices and higher operating expenses".

Over the full year, income rose 11% to $17.8bn, while adjusted earnings fell 22% to $18.5bn.

Vodafone was also in the red even as the telecoms operator said it expected full-year earnings to be at the upper end of forecasts after a strong third quarter, supported by top line growth in Germany and Turkey. The company said revenue in the period increased by 6.5% to �10.5bn.

Compass Group tumbled as the catering firm backed its full-year guidance following a strong start to the year, but said that pricing moderated as expected in the first quarter in a lower inflation environment.

Defence firm Babcock was hit by a downgrade to 'neutral' from 'buy' at Citi, while Hikma Pharmaceuticals lost ground after Brookfield confirmed after the close on Wednesday that it does not plan on making an offer for the company.

Paragon Banking was under the cosh as it traded without entitlement to the dividend.

On the upside, telecommunications giant BT gained as it said it was on track to meet full-year guidance as its third-quarter results met expectations, with revenue down 4% on the year and adjusted EBITDA 1% lower.

Playtech surged as it said full-year adjusted EBITDA was set to be "significantly" above consensus expectations following a strong second half.

LSEG, Experian and Relx also traded up, having been hit hard in the last two sessions amid worries about the impact of AI on software stocks.