London markets held back by tumbling pound and Shell profit plunge

British stocks edged down on Thursday led by a surging dollar and oil giant Shell’s profits miss.

The FTSE 100
  fell in early trading after disappointment over the Federal Reserve’s guidance over future easing spilled over to the U.K.

The blue-chip index moved off lows as traders digested Fed Chairman Jerome Powell’s comments that Wednesday’s 25 basis point cut was a mid-cycle adjustment rather than the start of a “lengthy cutting cycle”.

What’s moving the markets?

European stocks rebounded from earlier losses, shrugging off the Fed’s hawkish rate cut.

However, the FTSE 100’s gains were held back by a surging dollar and a damaging update from oil giant Shell.

The pound
  tumbled to 31-month lows of $1.2088 as the dollar rallied after Powell signaled further continued cuts were unlikely.

The weakening pound prevented the FTSE 100 from enjoying gains experienced by other European indices as it nudged down 0.2%.

Speaking to MarketWatch, Erik Norland, senior economist at CME Group said: “It’s worth noting that none of the eight members who voted to cut rates favored lowering them by 50bps or more, something to which traders assigned a 20% probability.

“This suggests that the FOMC [Federal Open Market Committee ] isn’t in as big a hurry to see lower rates as interest rate traders are.”

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Which stocks are active?

Royal Dutch Shell
  reported that profits plunged 25% in the second quarter on lower oil and gas prices and weaker margins. The Anglo-Dutch company’s stock fell 4.5% in early trading.

London Stock Exchange Group
  rallied 7.4% after confirming a $27 billion deal to buy data giant Refinitiv. The exchange operator is buying the business from a consortium of companies that includes Reuters and funds affiliated with U.S. asset manager Blackstone Group.

British American Tobacco
  climbed 6.5% after the company’s first-half profits beat estimates due to a boost in the sales of cigarette alternatives, including heated tobacco and vaping.

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