LONDON MARKETS: FTSE 100 Drops As Shell, Lloyds Slump After Earnings Reports
29 July 2016 - 2:59AM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Prospect of U.S. Fed rate hike helps keep benchmark off high
U.K. blue-chip stocks dropped on Thursday as investors absorbed
a flood of corporate earnings updates, with shares of Royal Dutch
Shell PLC and Lloyds Banking Group PLC falling after their
reports.
The FTSE 100 gave up 0.4% to end at 6,721.06, moving back from
its best close since last August reached on Wednesday
(http://www.marketwatch.com/story/ftse-100-gets-a-boost-as-earnings-reports-roll-in-2016-07-27).
The prospect of a U.S. interest-rate increase was helping draw
the London benchmark away from that 2016 high. Late Wednesday, the
U.S. Federal Reserve kept the door open for an interest-rate hike
in September
(http://www.marketwatch.com/story/fed-appears-more-open-to-september-rate-hike-2016-07-27),
saying near-term risks to its outlook have diminished.
Read:What investors fleeing U.K. properties are getting wrong
(http://www.marketwatch.com/story/what-investors-fleeing-uk-properties-are-getting-wrong-2016-07-28)
Earnings roll in: Shell (RDSB.LN) (RDSB.LN) shares dropped 2.5%
after the oil major posted a slide in second-quarter profit
(http://www.marketwatch.com/story/shell-profit-falls-93-amid-low-oil-prices-2016-07-28),
saying "lower oil prices continue to be a significant challenge
across the business, particularly in the upstream." Shell's
adjusted earnings of $1.05 billion fell short of a $2.27 billion
estimate drawn from a Wall Street Journal poll of analysts.
Lloyds (LLOY.LN) shares fell 5.8% after the retail bank, which
is about 9% owned by the U.K. government, warned that Brexit
uncertainty could hurt the U.K. economy in the coming months.
(http://www.marketwatch.com/story/lloyds-posts-profit-but-warns-brexit-may-hurt-2016-07-28)The
bank is ramping up its cost-cutting efforts by axing 3,000 more
jobs and closing roughly 200 branches. Lloyds swung to a profit of
GBP1.59 billion ($24.19 billion) in the first half of the year.
The lender will also be in the spotlight on Friday evening when
the European Banking Authority releases the results of its stress
tests
(http://www.marketwatch.com/story/europe-stress-test-results-to-put-spotlight-on-italys-troubled-banks-2016-07-28).
Smith & Nephew PLC (SN.LN) slid 5.6% after the
medical-equipment maker reported an 18% drop in first-half
profit.
On the upside, Rolls-Royce Holdings PLC (RR.LN) shares leapt 14%
after the engine maker said it foresees a stronger performance
(http://www.marketwatch.com/story/rolls-royce-earnings-hurt-by-weaker-pound-2016-07-28-24854951)
in the final six months of the year. It posted a GBP1.8 billion
($2.37 billion) net loss in the first half of the year.
Shares of Anglo American PLC (AAL.LN) pushed up 5.4% after the
platinum, copper and diamond miner said it's managed to pare down
its hefty debt load
(http://www.marketwatch.com/story/anglo-american-posts-loss-pares-debt-load-2016-07-28).
The company expects to sell $3 billion to $4 billion in assets this
year as it continues to restructure. Anglo's first-half net loss
widened to $813 million.
(END) Dow Jones Newswires
July 28, 2016 12:44 ET (16:44 GMT)
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