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(Alliance News) - Stock prices in London opened lower on Thursday on a busy day of corporate earnings, with Royal Dutch Shell weighing on the FTSE 100.
The large-cap FTSE 100 index was down 8.52 points, or 0.1%, at 7,244.75 early Thursday. The mid-cap FTSE 250 index was down 34.86 points, or 0.2%, at 23,138.02. The AIM All-Share index was flat at 1,226.91.
The Cboe UK 100 index was down 0.1% at 718.21. The Cboe 250 was down 0.1% at 20,788.41 and the Cboe Small Companies was down 0.1% at 15,463.74.
In mainland Europe, the CAC 40 stock index in Paris was up 0.2%, while the DAX 40 in Frankfurt was down 0.1%.
In the FTSE 100, WPP was the best performer, up 4.0%, after the ad agency reported a rise in third-quarter earnings and lifted annual guidance.
For the third quarter to September 30, WPP posted revenue of GBP3.24 billion, up 9.1% from a year before or 15% like-for-like. Revenue less pass-through costs was GBP2.64 billion, up 9.9% or 16% like-for-like.
Looking ahead, WPP raised its full-year 2021 guidance, expecting like-for-like growth in revenue less pass-through costs of 11.5% to 12%, with a headline operating margin slightly above 14%.
DS Smith was up 2.2% after the packaging firm said its performance in the six months to this coming Sunday remained in line with expectations.
DS Smith pointed to very positive box volume growth, good cost recovery through increasing pricing, and an enhanced performance from its US business which offset significant input cost increases.
Further, DS Smith said corrugated box volume growth was strong throughout the first half with the consumer goods sector accounting for over 80% of volume.
Lloyds Banking shares rose 2.0% as it reported a rise in third-quarter earnings in Charlie Nunn's maiden results report at the helm of one of the UK's largest lenders.
For the third quarter to September 30, net income was up 20% to GBP4.08 billion from GBP3.40 billion last year, and net interest income rose 8.8% to GBP2.85 billion from GBP2.62 million. Lloyds posted pretax profit of GBP2.03 billion, almost doubled from GBP1.04 billion last year, with net interest margin of 2.55%, up from 2.42%.
Looking ahead for 2021 as a whole, Lloyds expects net interest margin to be modestly above 250 basis points and also continues to target a return on tangible equity in excess of its cost of equity in the medium term.
"These numbers tend to suggest that there could therefore be something of a bumper year-end bonus, where share buybacks and even a special dividend are distinct possibilities," commented interactive investor's Richard Hunter.
At the other end of the large-caps, Royal Dutch Shell was the worst performer, with Shell 'A' and Shell 'B' shares down 2.0% and 1.9% respectively.
The oil major, the biggest company in the FTSE 100 by market capitalisation, posted third-quarter earnings which missed market forecasts against a backdrop of activist investor pressure.
Shell on Wednesday said it held talks with Third Point, after the activist shareholder went as far as suggesting the oil major should be split up. Reuters, citing a source close to the matter, on Wednesday reported Daniel Loeb's Third Point has built a stake worth nearly USD750 million in Shell.
For the three months to September 30, Shell posted adjusted earnings of USD4.1 billion, down from USD5.5 billion in the second quarter, but surging from USD955 million in the third quarter last year. The latest figure widely missed the company-compiled consensus estimate of USD5.3 billion.
Peer BP was down 1.3% in a negative read-across and as spot oil prices sank. Brent oil was quoted a USD83.81 a barrel Thursday morning, down sharply from USD85.32 late Wednesday.
In the FTSE 250, Synthomer was up 4.5% after the speciality chemicals company agreed to buy the adhesive resins business of Eastman Chemical Co for USD1 billion in cash.
To help pay for it, Synthomer set out plans to raise GBP200 million from a share placing, with 21% shareholder Kuala Lumpur Kepong pledging to take part in line with its existing holding. The placing will be priced in a bookbuild run by Barclays and Numis.
The remainder of the price tag will be met from a new USD300 million debt facility and existing cash. Synthomer said the acquisition is expected to deliver double-digit earnings per share accretion in the first year.
The euro was priced at USD1.1601, up from USD1.1592 ahead of the ECB rate decision. The central bank is widely expected to keep interest rates unchanged.
The ECB Governing Council meets in Frankfurt, announcing its latest policy decision at 1245 BST on Thursday. This will be followed by a press conference with President Christine Lagarde at 1330 BST.
The pound was quoted at USD1.3749 early Thursday, up from USD1.3726 at the London equities close Wednesday.
The Japanese Nikkei 225 index closed down 1.0%. In China, the Shanghai Composite ended down 1.2%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney ended down 0.3%.
Against the Japanese yen, the dollar was trading at JPY113.68 in London, down from JPY113.80 late Wednesday.
The Bank of Japan on Thursday announced its decision by an 8-1 majority vote to keep its key interest rate at negative 0.1%.
In addition, the central bank said that it would keep its loose monetary policy unchanged, choosing to continue expanding the monetary base until the annual rate of increase in the consumer price index exceeds 2% and remains above the target "in a stable manner".
The BoJ noted that the pandemic has continued to weigh on Japan's economy, to the point that it has lowered its growth forecast for the year ending March 2022 to 3.4% growth, compared to the previous guidance of 3.8%.
However, reflecting a more positive longer-term outlook, the BoJ lifted up its growth forecast for the year to March 2023 to 2.9% from a prior estimate of 2.7%.
Gold stood at USD1,802.52 an ounce, higher against USD1,792.13 late Wednesday.
Thursday's economic calendar has German inflation prints at 1300 BST, while US gross domestic product and the latest initial jobless claims numbers are at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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