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* Rolls-Royce hits more than three-week low after underlying
loss
* U.S. Fed sets average inflation target
* Ad firm WPP jumps on resuming dividend
* OneSavings Bank tops mid-cap index after results
* FTSE 100 down 0.8%, FTSE 250 down 0.1%
(Updates prices to close, adds comments)
By Sagarika Jaisinghani and Shreyashi Sanyal
Aug 27 (Reuters) - London stocks ended Thursday on the back
foot as earning updates from firms like Rolls-Royce underlined
the extent of corporate damage inflicted by the coronavirus
pandemic, while Federal Reserve Chief Jerome Powell's speech
brought few surprises.
The blue-chip FTSE 100 fell 0.8%, with banks
, mining companies and energy stocks
leading the declines.
Rolls-Royce slipped 1.2% to a more than three-week
low after sinking to a first-half underlying loss before tax of
3.2 billion pounds ($4.2 billion). The wider aero and defence
index lost 0.4%.
The Fed rolled out an aggressive new strategy to restore the
United States to full employment and lift inflation back to
healthier levels in a world where weak inflation, low interest
rates, and slow growth appear here to stay.
"Beyond that the speech was pretty surprise free, Powell
saving plenty for September's official Fed meeting. And while
this didn’t do anything for the wider markets, the US indices
celebrated his statement," said Connor Campbell, financial
analyst at SpreadEx.
Trillions of dollars in stimulus has sent global equity
benchmarks back to their pre-pandemic highs, but the UK's FTSE
100 is still about 21% below that level as the economy struggles
to recover from a record crash in the second quarter.
Data on Thursday showed British car production rose sharply
in July but is still well below last year's level, while another
set of figures showed firms in the services industry cut jobs
rapidly in the three months to August to ride out the pandemic.
The mid-cap FTSE 250 edged 0.1% lower but most of
its declines were contained as specialist mortgage lender
OneSavings Bank surged 15.7% on reporting a 2% rise in
its underlying net loan book.
Hays Plc, one of the world's biggest recruitment
agencies fell 0.4% as it posted a 12% fall in annual net fees,
while advertising company WPP rose 6.5% as it resumed
its dividend after beating dire forecasts for second-quarter
trading.
(Reporting by Sagarika Jaisinghani and Shreyashi Sanyal in
Bengaluru; additional reporting by Sinead Carew in New York;
editing by Uttaresh.V and Angus MacSwan)
