Market swings into negative territory as shares plunge at Lloyds
The London market swung into negative territory as shares plunged at Lloyds Banking Group and Royal Dutch Shell.
The FTSE 100 index was down 29.4 points to 6721.1 as Lloyds slumped after announcing swingeing job cuts and branch closures.
Shares were off more than 5% or 3.3p to 52.5p as it moved to cut 3,000 jobs and shut 200 branches as it expects the "lower for longer interest rate environment" to continue.
The bank made the announcement alongside results for the first half of the year, which saw statutory profits more than double to £2.5 billion, but the lender warned that Brexit could have an adverse impact on its future performance.
Lloyds was joined by blue-chip giant Royal Dutch Shell in leading the market lower, as the oil major announced a 72% slump in profits for the second quarter.
The firm said adjusted earnings tumbled from 3.76 billion US dollars (£2.85 billion) to 1.05 billion US dollars (£800 million) as chief executive Ben van Beurden flagged the "significant challenge" lower energy costs are posing.
Shares in Royal Dutch Shell B were down 53.5p to 2051.5p.
The price of oil remained under pressure, falling 1.2% to 42.94 US dollars a barrel, amid fresh concerns over an emerging global supply glut.
Away from the top tier, the FTSE 250 remained close to erasing its post-Brexit vote losses despite slipping 13.6 points to 17,252.3 - just shy of its closing figure of 17333.51 on June 23.
The mid-cap index - seen as a better barometer for the health of the UK economy - took a hammering following Britain's vote to leave the European Union, sliding 7% to 16088.1 on June 24.
On the currency markets, the pound was down 0.8% against the euro at 1.184 euros, while sterling slipped 0.5% against the dollar at 1.314 US dollars.
In stocks, Rolls-Royce was in the ascendancy after boss Warren East pledged up to £200 million in cost savings by 2017 and swung the axe on 400 top jobs.
The staff cuts are double the 200 previously planned for 2016 and come as Rolls reported an 80% slump in interim profits to £104 million in the first half of the year.
Shares at the engine maker were up more than 13% or 99p to 831p.
Game of Thrones broadcaster Sky was enjoying a lift as it brushed aside economic uncertainty surrounding the referendum result to drive up revenues and profits.
Shares climbed 16.5p to 904p after it reported a 12% rise in operating profits for the full year to June 30, while revenues climbed 7% to £11.9 billion over the period.
The financial boost came as full-year revenues leapt above £8 billion to £8.3 billion in the UK and Ireland for the first time in its history.
Group chief executive Jeremy Darroch said the Brexit vote "doesn't really change our thinking on any of our markets".
Rival BT also raced ahead after cheering better than expected earnings and stating that crunch talks with Ofcom would continue over the independence of its Openreach broadband network.
The telecoms giant rose 12.3p to 414.4p as revenues lifted 35% to £5.8 billion in the first quarter, compared with the same period in 2015.
However, BT said the results were impacted by its £12.5 billion takeover of EE in January.
The biggest risers on the FTSE 100 Index were Rolls-Royce up 99p to 831p, AstraZeneca up 337p to 5027p, Anglo American up 43.4p to 842.6p, RELX up 50p to 1456p.
The biggest fallers were Lloyds Banking Group down 3.3p to 52.5p, Smith & Nephew down 73p to 1227p, SSE down 85p to 1541p, Schroders 109p to 2531p.