London stocks ended higher on Thursday, with the FTSE 100 gaining 0.3% as stronger-than-expected earnings from Shell and a rally in WPP helped offset heavy losses for Haleon, while investors assessed interest rate decisions in Europe and the United States.
The FTSE 100 closed 27.57 points higher at 10,722.07, while the FTSE 250 advanced 0.1% to 24,674.16 and the AIM All-Share gained 0.3% to 763.45.
European markets also strengthened, with France’s CAC 40 rising 1.1% and Germany’s DAX gaining 1.3%, following the European Central Bank’s decision to leave interest rates unchanged.
The ECB maintained its deposit rate at 2.50%, its main refinancing rate at 2.65% and its marginal lending rate at 2.90%, while warning that elevated energy prices continued to threaten the inflation outlook and economic growth.
The decision followed confirmation that ECB President Christine Lagarde will step down on 7 February 2027, eight months before her scheduled departure in October.
Lagarde, who has led the central bank since November 2019, announced her decision as policymakers face renewed inflationary pressures linked to higher energy costs.
JPMorgan analyst Greg Fuzesi said the ECB’s decision had been widely expected, although comments from Lagarde suggested that policymakers had considered raising rates.
JPMorgan expects a quarter-point interest rate increase in December, followed by another potential rise in March 2027, reflecting concerns that inflation could remain elevated.
In currency markets, sterling strengthened to $1.3369 against the US dollar, compared with $1.3310 on Wednesday, while rising against the euro to €1.1977.
Wall Street traded lower around London’s close, with the Dow Jones Industrial Average and S&P 500 both slipping 0.3%, while the technology-heavy Nasdaq Composite fell 1.3%.
The decline was driven partly by a sharp sell-off in Alphabet, whose shares plunged approximately 12% following disappointing quarterly results.
Investors reacted negatively to weaker-than-expected revenue and earnings, declining free cash flow and slower growth in Google’s core Search business.
David Morrison of Trade Nation said the results raised questions about whether competing artificial intelligence platforms were beginning to erode Google’s traditional search dominance.
The sell-off also highlighted growing scrutiny of the substantial capital expenditure required to develop AI infrastructure and whether those investments will generate sufficient returns.
The Federal Reserve’s decision to leave US interest rates unchanged on Wednesday also remained in focus, particularly as fresh inflation figures reinforced concerns about persistent price pressures.
US personal consumption expenditures inflation accelerated to 3.6% in September from 3.4% in August, while the core measure, which excludes food and energy, increased to 3.1% from 3.0%.
Both readings matched market expectations but remained above the Federal Reserve’s 2% inflation target.
Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability, although investors remain divided over how quickly policymakers will raise borrowing costs.
Morgan Stanley expects two further quarter-point rate increases in December and March, taking the federal funds target range to 4.25%–4.50%.
Back in London, WPP led the FTSE 100 gainers, jumping 5.4% to 404.90p, after maintaining its full-year guidance following a third-quarter trading performance broadly in line with expectations.
The advertising and marketing group reported revenue of £3.27 billion, up 0.5%, although revenue excluding pass-through costs declined 2% to £2.41 billion.
WPP continues implementing its Elevate28 turnaround strategy, aimed at improving operational performance and strengthening its competitive position.
Shell gained 2.1% after reporting a near doubling of third-quarter adjusted earnings to $10.81 billion, compared with $5.43 billion a year earlier.
The result exceeded analyst expectations of approximately $10.33 billion, supported by stronger refining margins, higher realised liquefied natural gas prices and increased production volumes within its Integrated Gas business.
The energy giant also announced an increase in its quarterly share buyback programme, reinforcing its commitment to shareholder returns.
RBC Capital Markets said Shell’s earnings and cash flow performance demonstrated its ability to benefit from disruption across international oil, gas and refined product markets.
Haleon was the FTSE 100’s biggest faller, plunging 15% to 317.70p, after cutting its full-year revenue growth guidance following weaker-than-expected third-quarter trading.
The consumer healthcare group now expects 2026 organic revenue growth of approximately 2.5%, down from its previous forecast of 3%–5%.
Quarterly revenue increased 2.5% to £2.87 billion, but organic growth of 2.6% fell short of market expectations of 3.4%.
The company attributed the weaker performance to subdued cold and flu demand in North America and regulatory changes affecting imports of Centrum products into China.
Lloyds Banking Group also declined, falling to 98.66p, while St James’s Place, Rio Tinto and Diageo were among the other major blue-chip fallers.
Additional FTSE 100 gainers included 3i Group, London Stock Exchange Group, ICG and Melrose Industries, helping the index maintain its positive position despite weakness elsewhere.
In commodity markets, Brent crude eased to $113.75 a barrel, compared with $116.37 on Wednesday, amid renewed diplomatic efforts to revive negotiations between Washington and Tehran.
Reports suggested US Vice President JD Vance had contacted Iranian officials in an attempt to establish a framework for renewed peace discussions.
Gold also slipped, trading at $4,012.39 an ounce, compared with $4,039.18 a day earlier.
US Treasury yields were relatively stable, with the 10-year yield easing to 5.00%, while the 30-year yield remained at 5.33%.
The FTSE 100’s advance reflected strength in selected heavyweight companies rather than a broad market rally, with Shell’s exceptional earnings and WPP’s maintained guidance providing support despite disappointing results elsewhere.
Investors remain focused on the interaction between corporate profitability, inflation and monetary policy, particularly as rising energy costs continue to influence central bank decisions.
Attention will now turn to Friday’s third-quarter results from NatWest, BP and AstraZeneca, alongside the Bank of Japan’s interest rate announcement, European inflation figures and Canadian economic growth data, as markets assess the outlook for the final months of 2026.
