Top-flight shares were still in the red on Thursday as negative news in banking and oil offset upbeat results from miners and telecom companies.
The FTSE 100 Index was 6.56 points adrift at 6,743.87 in lunchtime trading as Lloyds Banking Group PLC (LON:LLOY) hiked profits but warned on the UK outlook.
Lloyds said first-half statutory profit before tax more than doubled to £2.5bn, although underlying profit fell 5% to £4.2bn and total income dropped 1% to £8.9bn.
The bank hiked its interim dividend 13% year-on-year to 0.85 pence per share and affirmed its guidance for 2016.
But it unveiled plans to close an extra 200 branches and cut a further 3,000 jobs by the end of 2017. Lloyds shares fell 1.9p, or 3.4%, to 53.84p.
Chief executive António Horta-Osório said: "Following the EU referendum, the outlook for the UK economy is uncertain.
"While the precise impact depends upon a number of factors, including EU negotiations and political and economic events, a deceleration of growth seems likely."
Elsewhere, Royal Dutch Shell PLC (LON:RDSB) leaked 3.4% to 2033.5p as the oil giAnt blamed low oil prices and the costs of its acquisition of BG Group for a 72% drop in second quarter earnings.
Anglo American plc (LON:AAL) gained nearly 5% to 838.8p as it reduced net debt by more than US$1bn in the first half and said cost cuts and asset sales were on track.
Shares in Sky PLC (LON:SKY) were up 3.3% at 916.5p as the satellite broadcaster reported higher sales and profits but said customer turnover had increased amid competition from rivals.
One of those competitors, BT Group PLC (LON:BT.A), also saw its shares rise nearly 3.2% to 415.1p after reporting a good first quarter.
Connor Campbell at Spreadex said: "The index is caught between the push and pull of its morning reporters, the gains from the likes of Sky and Anglo American countering the losses incurred by Shell and Lloyds.
Premier Farnell PLC (LON:PFL) soared 17.2% to 192.75p as it got a rival takeover offer from US company Avnet Inc (NYSE:AVT), trumping an earlier bid from a Swiss engineer.
In small-caps, West Africa-focused miner Stellar Diamonds PLC (LON:STEL) signed binding heads of terms with Citigate Commodities Trading, a Dubai based commodities group, to formulate joint ventures over the Baoulé kimberlite project in Guinea. Shares rose 18.2% to 6.5p.
Octagonal Plc (LON:OCT) jumped 16.7% to 1.225p as sUBSidiary Global Investment Strategy reported a record first quarter.
Redstoneconnect PLC (LON:REDS) bounced 6.25% to 1.28p after the smart building technology supplier won a three-year contract from investment bank UBS.
But Altona Energy Plc (LON:ANR) lost 30.4% to 0.4p on news that its Arckaringa Coal Chemical joint venture would need a petroleum exploration licence before starting test drilling at its Arckaringa site in South Australia.
And Australian gold miner Keras Resources plc (LON:KRS) lost its gleam by 21.7% to 0.9p after reporting lower-than-expected production and higher costs from its small pits.
Herencia Resources PLC (LON:HER) was also off colour, falling 18.75% to 0.0325p as the South America-focused miner sold its 70% stake in the PaguAnta zinc, silver and lead Project in northern Chile.
The top winner was Rolls-Royce Holdings PLC (LON:RR.), up 15.1% to 842.5p.
The biggest loser was Smith & Nephew PLC (LON:SN.), down 4.6% to 1,240p. Net profit fell 18% due to weak China sales.
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Preview at 6.51am
The FTSE 100 is called to open marginally lower as Asian equities lagged overnight and the US Fed made no move on raising interest rates.
The blue chip benchmark closed Wednesday at a more than one-year high, while junior market AIM had its best level in over two years, and mid-caps briefly beat pre-Brexit levels.
Among risers were housebuilders and drugs group, GlaxoSmithKline (LON:GSK), which announced investment in the UK. Also cheering investors was UK second quarter growth data.
The FTSE 100 closed 26 points up at 6,750 but today is called to open around four points lower.
In the US, the Dow Jones barely moved the needle, closing down 0.01% to 18,472, while the S&P500 lost 0.12% at 2,166. The tech heavy Nasdaq exchange added 0.58% to stand at 5,139.
Japan's market tumbled 193 points, or 1.16% overnight, as traders are wary about government measures on a stimulus package and in China, there were reportedly fears over a clampdown on certain financial products.
As had been widely expected, in the USA, Janet Yellen made no change on interest rates, deciding to hold rates between 0.25% and 0.5% due to inflation below the bank's target, though a rise is still expected this year.
Household spending in the US is increasing, as are jobs.
Another day of UK earnings are expected today, with around one-sixth of the FTSE 100 companies set to update the market.
Oil giAnt Royal Dutch Shell (LON:RDSB) is one, as is banking titan Lloyds Banking (LON:LLOY).AstraZeneca (LON:AZN) and Diageo (LON:DGE) also report.
City headlines
Hinkley: Point of no return for nuclear project as UK prepares to sign sUBSidy deal – The Telegraph
Take off! London lifted by green light for City Airport expansion as markets touch post-Brexit highs – CITY AM
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