FTSE 100 rises on strong earnings from Shell and Standard Chartered

FTSE 100 earnings: Britain's benchmark share index, the FTSE 100, saw a boost on Thursday driven by the stellar performance of Shell and Standard Chartered, while investors found reassurance in the Federal Reserve's stance on interest rates.

The FTSE 100 climbed by 0.5 per cent to reach 8,157.63 points, edging closer to its record high of 8,199.95 points achieved earlier in the week.

Standard Chartered witnessed a remarkable surge of 6.6 per cent, reaching a six-month high and leading gains on the blue-chip index. The emerging markets-focused lender reported a 5.5 per cent increase in first-quarter pretax profit, surpassing market estimates. Matt Britzman, equity analyst at Hargreaves Lansdown, commented, "This was as close to a clean sweep of first-quarter results as you can get. Pretty much every major line item was better than markets had expected."

The FTSE 350 banks index rose by 1.3 per cent to a more than five-year high, reflecting the broader positive sentiment in the banking sector.

Shell witnessed a 1.6 per cent increase after the energy giant announced a much stronger-than-anticipated first-quarter profit of $7.7 billion, attributed to robust oil trading and improved refining margins.

While Asian markets also experienced gains, other European markets remained subdued following the Federal Reserve's decision to maintain interest rates steady, as anticipated. Fed Chair Jerome Powell hinted at potential future policy adjustments leaning towards maintaining or reducing rates rather than increasing them.

Market momentum moving forward will likely be influenced by forthcoming data, particularly regarding the possibility of a rate cut by the Federal Reserve later in the year. Money markets have already priced in a potential rate cut by the Bank of England (BoE) in September, following the Fed's recent meeting. The BoE is scheduled to convene next week.

Meanwhile, the UK's mid-cap FTSE 250 (FTMC) remained relatively unchanged after two consecutive days of losses.

In other news, Smurfit Kappa saw a 3.7 per cent increase after reporting higher first-quarter core profit compared to the final quarter of 2023. The paper packaging producer signaled an end to the dip in demand for packaging, further buoying investor confidence.

(With Reuters inputs.)