August 1, 2019 / 9:02 AM / 2 months ago

UPDATE 2-Shell, Fed stance weigh on FTSE 100; BoE action hurts mid-caps

* FTSE 100 about flat, FTSE 250 down 0.2%

* Shell drops on poor results

* BAT jumps to highest since 2008 on upbeat results, forecast

* LSE hits life high on Refinitiv buy

* Small-cap Kier, Thomas Cook skyrocket (Adds news items, analyst comment, updates to closing prices)

By Muvija M and Shashwat Awasthi

Aug 1 (Reuters) - London’s FTSE 100 ended flat on Thursday despite a profit miss from Shell and dampened hopes of big U.S. interest rate cuts, while the mid-cap FTSE 250 index slipped after Brexit worries led the Bank of England to cut its growth forecasts.

The main index dipped 0.03%. Losses were contained by BAT and as London Stock Exchange surged 6.5% to an all-time high after a deal to buy financial information firm Refinitiv, in which Reuters News parent Thomson Reuters holds a 45% stake.

The midcap index gave up 0.2% as the BoE’s actions overshadowed results-driven jumps in medical products maker Convatec and outsourcer Capita.

Shell, the highest-valued company on the FTSE 100, fell 5% and lost more than 10 billion pounds in market capitalisation after its second-quarter profit slumped to a 30-month low.

But British American Tobacco climbed 6.9% on its best day since Nov. 2008 as higher demand for e-cigarettes helped its first-half sales beat forecasts and it pointed to a stronger second-half performance.

On the FTSE 250, ConvaTec stood out with an 18% surge after revenue trends improved in its second quarter. Capita advanced 17.3% as it remained on track to meet its turnaround targets and said Brexit could present new opportunities for private sector contractors.

But the index’s fate was sealed after the BoE flagged increased Brexit worries and a slowing global economy and gave no indication that it was considering lowering rates.

“Though the BoE failed to spark the kind of fireworks produced by its American counterpart, it nevertheless played its part in chipping away at sterling’s already fragile confidence,” Spreadex analyst Connor Campbell said.

Global markets had earlier tumbled after the U.S. Federal Reserve said Wednesday’s 25-basis-point easing did not guarantee sustained rate cuts in the future.

Still, the exporter-heavy FTSE 100 is on course to post its biggest annual rise since 2016, drawing strength from a slump in the pound over no-deal Brexit fears.

In other moves, Rio Tinto gave up 3.4% after announcing capital returns that Jefferies analysts called “underwhelming”, while weakness in copper prices hit other miners.

Small-cap Kier, which has been battling rising debt, soared 33.3% as its average month-end net debt for 2019 was at the lower end of its forecast range.

Thomas Cook shot up almost 26% after Nesat Kockar, the owner of Turkish tour operator Anex Tourism Group, disclosed a stake in the travel group.

Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Saumyadeb Chakrabarty

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