London stocks moved higher at midday on Thursday, with the FTSE 100 gaining 0.4% as stronger-than-expected earnings from Shell helped offset sharp losses for Haleon, Lloyds Banking Group and St James’s Place, while investors awaited the European Central Bank’s interest rate decision.
The FTSE 100 rose 41.13 points to 10,735.63, extending Wednesday’s modest gains following Chancellor John Healey’s Autumn Budget. The FTSE 250 edged 0.1% higher to 24,670.68, while the AIM All-Share gained 0.1% to 761.98.
Shell led the FTSE 100 gainers, surging 3.8% after reporting quarterly earnings ahead of market expectations and increasing its share buyback programme. The energy giant’s stronger financial performance provided support for London’s blue-chip index despite a decline in crude oil prices.
WPP advanced 1.5% after maintaining its full-year guidance following third-quarter trading that was broadly in line with expectations.
However, Haleon suffered the sharpest fall, plunging 16% after lowering its revenue outlook and announcing accelerated operational changes in Brazil.
The consumer healthcare group warned that the changes would affect fourth-quarter revenue, prompting a substantial sell-off in its shares.
St James’s Place declined 6% after reporting a sharp slowdown in third-quarter net inflows, despite reaching a record level of funds under management.
Net inflows fell by approximately two-thirds to £570 million, compared with £1.76 billion in the same period last year.
However, funds under management increased 14% to a record £242.44 billion, supported by investment performance and continued positive net client flows.
Lloyds Banking Group fell 4.4% despite reporting that third-quarter pre-tax profit had almost doubled, highlighting investor caution towards UK lenders following the Government’s decision to increase the bank corporation tax surcharge.
The contrasting share price reactions demonstrated that stronger reported profitability was not necessarily enough to satisfy elevated market expectations.
Among mid-cap companies, Bridgepoint Group gained 4.3% after Bank of America upgraded the investment manager to ‘buy’ and increased its share price target to 490p from 320p.
Rank Group dropped 3.2% after warning that the increase in machine games duty announced in Wednesday’s Budget would add approximately £9 million to its annual costs.
Among smaller companies, Vanquis Banking Group plunged 37% after sharply reducing its profitability guidance, raising concerns about its near-term financial outlook.
Investor attention also turned to the European Central Bank following President Christine Lagarde’s announcement that she intends to step down on 7 February 2027, eight months before the scheduled end of her term.
The decision creates an earlier-than-expected leadership transition at the ECB, with former Dutch central bank governor Klaas Knot and Spain’s Pablo Hernández de Cos among the potential successors.
The ECB is widely expected to leave interest rates unchanged, although investors will examine its accompanying statement for indications about the inflation outlook and future borrowing costs.
The announcement follows Wednesday’s US Federal Reserve decision to maintain interest rates, with Chair Kevin Warsh reiterating the central bank’s commitment to restoring price stability.
Wall Street futures pointed towards a weaker opening, with the Dow Jones Industrial Average expected to fall 0.1%, the S&P 500 down 0.2% and the Nasdaq Composite facing a 1% decline.
Alphabet shares dropped approximately 11% in pre-market trading, despite the Google parent forecasting stronger revenue growth from its Cloud business in 2027.
Investors appeared concerned about slowing growth in Google’s core Search operations and the potential impact of substantial artificial intelligence investment on profit margins.
In currency markets, sterling strengthened to $1.3328 against the US dollar, compared with $1.3310 on Wednesday, while also advancing against the euro to €1.1954.
Brent crude eased to $113.83 a barrel, down from $116.37 at Wednesday’s close, as renewed hopes of diplomatic progress between Washington and Tehran reduced some immediate concerns about Middle East energy supplies.
Gold traded slightly lower at $4,027.30 an ounce, compared with $4,039.18 on Wednesday.
The FTSE 100’s midday advance was largely driven by strength in Shell and selected industrial stocks, while sharp declines in Haleon and financial services companies demonstrated continued sensitivity to disappointing earnings and changes in corporate guidance.
Attention will now turn to the European Central Bank’s interest rate announcement, US personal consumption expenditures inflation figures and weekly jobless claims, as investors assess the outlook for monetary policy, corporate profitability and global economic growth.
