Thursday Morning Markets: FTSE 100 Climbs as Rolls-Royce Jumps, Rentokil Plunges

London’s FTSE 100 has climbed 0.6% on Thursday morning, outpacing the FTSE 250‘s 0.4% gain, while European peers are mixed, with the DAX flat, the CAC 40 up 0.8% and the Stoxx 50 adding 0.6%.

Markets are digesting Wednesday’s Federal Reserve decision, where a divided FOMC voted 9-3 to hold rates at 3.50%-3.75% for a fifth straight meeting, with three officials dissenting in favour of a hike as Middle East-driven inflation concerns mount.

The Iran conflict remains the dominant geopolitical risk, with Tehran resuming missile strikes on US forces after a brief pause, prompting Washington to launch fresh “powerful” retaliatory strikes on Iran, while Saudi-backed forces hit Iran-linked militants in Iraq.

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Despite the escalation, Brent crude is trading flat today after recent volatility, and spot gold is unchanged at $4,067.

Corporate earnings dominated the FTSE tape once again today….

Rolls-Royce shares have gained after raising full-year guidance, with underlying operating profit up 46% to £2.5bn.

Rio Tinto has climbed 2.4%, and Informa is up 2.25% on solid interim results. Anglo American also edged higher after confirming its $3.875bn Steelmaking Coal sale and progress on the Teck merger.

On the downside, Rentokil Initial has cratered nearly 18% despite headline organic growth of 3.6%, as investors focus on weakening demand in North American residential.

Sage is down 3.2%, and London Stock Exchange Group has dropped 3% even after posting record first-half results and raising guidance. Lloyds and Haleon (-1.6%) also reported today, with Lloyds shares firmer (+1.7%).

In the FTSE 250, Mondi has jumped over 13% despite a sharp EBITDA decline, as cost cuts and reduced capex reassured investors.

Ocado (+5.2%) and Ceres Power (+5.0%) have also rallied, while Alfa Financial Software slid 4.6% on a cautious trading update.