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(Alliance News) - The FTSE 100 index was able to hold on to its morning gain in midday trade on Thursday, outperforming European peers, thanks to upbeat earnings from energy firm Shell, with peer BP rallying in sympathy.
"US tech may be letting the side down when it comes to third-quarter earnings but bumper profit from index heavyweight Shell helped lift the FTSE 100 on Thursday morning," AJ Bell head of investment analysis Laith Khalaf said.
The FTSE 100 index was up 23.72 points, or 0.3%, at 7,079.79, and the mid-cap FTSE 250 was up 21.35 points, or 0.1%, at 18,127.56. The AIM All-Share, however, was down 3.16 points, or 0.4%, at 806.51.
The Cboe UK 100 was up 0.4% at 707.37, the Cboe UK 250 was up 0.3% at 15,546.53, and the Cboe Small Companies was up 0.1% at 12,395.09.
Markets in Europe were now waiting on the European Central Bank and President Christine Lagarde.
AJ Bell's Khalaf said: "Once again, the wider market seems to be pinning some hopes on central banks looking at evidence of a deteriorating economy and reacting accordingly by slowing the pace of rate rises."
In European equities on Thursday afternoon, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was 0.7% lower.
Analysts are all but convinced the ECB will up rates by another 0.75% on Thursday, but some say there is room for a full percentage point raise - 100 basis points.
Observers will be looking out for plans on how the central bank plans to reduce its balance sheet. In response to various crises, the ECB has expanded its balance sheet to a record EUR8.8 trillion, which is about 70% of annual eurozone gross domestic product.
"The more the ECB normalises its policy rates, the more apparent it becomes that the amount of excess liquidity in the system is posing challenges for the conduct of monetary policy. Several policymakers have therefore urged the Council to discuss liquidity conditions, a potential quantitative tightening and/or ways to 'encourage' banks to repay their [targeted longer-term refinancing operations] loans," analysts at Rabobank said.
The Frankfurt-based central bank announces its interest rate decision at 1315 BST, which will be followed by a press conference hosted by Lagarde. After the ECB, the Federal Reserve will make a rate decision next week Wednesday and the Bank of England a day after its US counterpart.
The euro traded at USD1.0035 midday Thursday, down on USD1.0064 late Wednesday.
The pound fell below the USD1.16 mark Thursday midday. Sterling was quoted at USD1.1567, down from USD1.1612 at the London equities close on Wednesday.
In London, Shell shares advanced 5.4%.
The oil company reported a swing to a net profit in the third quarter compared to a year ago, but the profit fell behind the second quarter as Shell warned of volatility in global energy markets.
Shell reported a net profit totalling USD6.74 billion in the third quarter, after oil prices surged, improving from a loss after tax of USD447 million in the same period last year.
Flush with cash, Shell said it will buy back USD4 billion of its shares, after completing a USD6 billion share buyback announced in July. It expects to complete its USD4 billion share buyback to complete by February 2, the day it will release its 2022 results.
interactive investor analyst Victoria Scholar said: "The current quarter looks brighter for Shell thanks to recent bullish oil price momentum driven by OPEC+'s decision to sharply cut production at the start of October.
"The oil giant looks set to enjoy a tailwind from Brent crude's more than 12% jump over the last month, reversing some of the recent oil market downtrend. Amid the equity market turmoil, oil & gas has been a major pocket of outperformance this year with investors in Shell benefiting from its dividend, share buyback and share price appreciation of nearly 40% year-to-date."
BP gained 3.4% on a positive read-across from the Shell results. BP reports its own third-quarter results on Tuesday next week.
Airtel Africa was at the bottom of the blue-chip index, giving back 8.4%.
It saw strong interim revenue growth, but profit was held back by the devaluation of some African currencies.
Pretax profit fell 9.1% to USD516 million from USD567 million, as Airtel recognised USD358 million in net finance costs, compared to USD169 million a year before.
In the half year ended September 30, the Africa-focused telecommunications firm said revenue grew 13% year-on-year to USD2.57 billion from USD2.27 billion. In constant currency, it rose 17%, with appreciation in the Zambian kwacha offset but devaluations in several other currencies.
Also towards the bottom of the FTSE 100, Anglo American lost 4.6%.
The minder reported a mixed quarterly production performance, with the output of most commodities declining amid a challenging operating conditions.
Anglo kept its annual production guidance mostly unchanged.
Peers Rio Tino, Glencore, Antofagasta lost 4.1%, 3.2% and 2.8% in a negative read-across.
In New York, the open is expected to be mixed, with the Dow Jones Industrial Average seen up 0.3% and the S&P 500 up 0.1% but the tech-heavy Nasdaq Composite down 0.3%.
The Nasdaq benchmark continues to be hit by troubling tech earnings, with Meta Platforms down 20% in pre-market trading.
The Facebook-owner late Wednesday said revenue fell 4% to USD27.71 billion in the three months that ended September 30 from USD29.01 billion a year before. Income from operations dropped 46% to USD5.66 billion versus USD10.42 billion. Net income was USD4.40 billion, down 52% versus USD9.19 billion.
Big tech earnings will continue Thursday, with Amazon and Apple to report after the closing bell in New York on Thursday.
Hargreaves Lansdown analyst Susannah Streeter said of Meta: "The Facebook-owner is battling a downturn in business confidence which is showing up in lower ad revenues and the Pied Piper tunes of Tik Tok which are luring potential younger customers away in their millions. Apple, Amazon, Intel and Mastercard are the big names on the billboard to watch later and eyes will be keenly trained on fresh signs of consumer and business confidence."
Gold was quoted at USD1,661.00 an ounce midday Thursday in London, down from USD1,665.70 on Wednesday evening.
Against the yen, the dollar was quoted at JPY146.30, down from JPY146.50.
Aside for the ECB, the economic calendar has a US gross domestic product reading at 1330 BST.
The US economy is forecast to grow 2.4% at an annual rate, according to FXStreet-cited consensus. A stronger-than-expected reading may give the Federal Reserve more impetus to impose stronger rate hikes between now and the end of the year.
By Paul McGowan; paulmcgowan@alliancenews.com
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