Blue-chip stocks in the U.K. finished slightly higher Thursday, with the benchmark FTSE 100 partly weighed by a slide in shares of Royal Dutch Shell PLC and Schroders PLC after their quarterly results.
That left London’s blue-chip gauge to lag behind the broader European equity market, which climbed after the European Union late Wednesday made sufficient progress on trade issues to avert an immediate tariff war.
How markets are moving
The pound GBPUSD, -0.5382% traded at $1.3152, slipping from $1.3191 late Wednesday in New York.
What’s driving the market
Before finishing with a slight gain, the London benchmark drifted between small gains and losses as investors sifted through a pile of new earnings reports. Shell shares were lower after the oil producer’s second-quarter earnings fell short of expectations, and even as the company said it’s launching a $25 billion share-buyback program. Shell’s stock has the second-heaviest weighting on the benchmark, at 6.2%, FactSet data show.
Gains for British American Tobacco PLC and Smith & Nephew PLC, however, helped keep the FTSE 100 in the green.
But the U.K.’s blue-chip market was lackluster compared with moves across continental European shares SXXP, +0.87% after European Commission President Jean-Claude Juncker and Trump said after European trading closed on Wednesday that they had agreed to work toward “zero tariffs” and “zero subsidies on non-auto industrial goods.”
Trump, who met with Juncker at the White House, also said the EU would buy more U.S. soybeans and that he would work on resolving tariffs on European steel and aluminum.
The Trump-EU trade truce “is a strong short-term market positive, but … we remain alert to the non-trivial possibility that negotiations fall apart,” said Arndt Ellinghorst, head of global automotive research at Evercore ISI Group, in a note.
Stocks were little changed after the European Central Bank left interest rates unchanged, as expected, and affirmed its plan to end its monthly bond-buying program in December. ECB President Mario Draghi is set to hold a news conference at 1:30 p.m. London time, or 8:30 a.m. Eastern.
Stocks in focus
Shell shares RDSB, -3.61% RDS.B, -4.11% fell 3.6% as the oil producer posted second-quarter profit on a current-cost-of-supply basis — a number similar to the net income that U.S. oil companies report — of $5.2 billion. That was below analyst expectations of $5.97 billion, according to 23 estimates rounded up by Vara Research.
Schroders shares SDR, -4.13% dropped 4.1% even as the asset manager’s first-half profit rose 8%. “While revenues topped expectations, [first-half 2018] assets under management and net inflows were weaker than we & consensus had forecast,” UBS said in a research note.
GlaxoSmithKline PLC GSK, -0.40% fell 0.4% as the drug maker said a U.S. Food and Drug Administration committee didn’t approve mepolizumab to treat patients with chronic obstructive pulmonary disease, or COPD, on maximum inhaled therapy.
Diageo PLC shares DGE, -0.95% were down 1%. The maker of Johnnie Walker scotch whisky and Smirnoff vodka warned that foreign-exchange rates movements would hit net sales and operating profit in fiscal 2019. Diageo did say it’s planning to buy back up to £2 billion in shares.
Smith & Nephew shares SN., +3.03% moved up 3% as the medical-equipment manufacturing company backed its full-year outlook, even as first-half pretax profit fell 11%, and said it’s paying an interim dividend of 14 cents, up from 12.3 cents in the year-ago period.