Shell smashes profit forecast

London open

City traders said they expected the FTSE to open 2 points higher on Thursday morning.

Stocks to watch

As it revealed 6,500 job cuts, Royal Dutch Shell also delivered a second-quarter adjusted profit of $3.8b that was well ahead of consensus estimates of $3.4bn. The oil major also kept its dividend steady at $0.47 for both A and B shares.

Centrica also revealed a big swathe of job cuts, announcing that it will slash a net 4,000 jobs from its workforce, double the rumoured amount. The company, which said it was aiming to cost cuts by £750m a year by 2020, will cut back investment in oil and gas production by more than half.

AstraZeneca’s second-quarter numbers came in better than expected, with revenue and earnings per share both ahead of analysts’ expectations as generic competition and the effects of a stronger US dollar were offset by the spinning off of assets. Earnings per share fell 8% to $1.21, but this was better than the $1.07 expected.

Newspapers

Despite billions of pounds in fines, several years of investigations and a slew of criminal prosecutions, many banks have yet to take on board the lesson of the market-rigging scandals, a report by the City watchdog has found. In a series of damning findings, the Financial Conduct Authority said that some lenders had yet to take even basic steps towards ensuring there could be no repeat of the Libor,foreign exchange and gold price manipulation scandals. - The Times

Barclays’ new boss is looking to slash costs in a bid to boost returns at the bank, after years of disappointing financial returns, in a move which will lead to more job losses. Executive chairman John McFarlane, who fired chief executive Antony Jenkins earlier this month, yesterday laid out his vision, which included freezing the dividend at 6.5p. The move reverses a promise made by Mr Jenkins in May. - The Daily Telegraph

The Federal Reserve signalled that it remained on course to lift interest rates this year but left its options open on when to pull the trigger as it awaits more evidence of the strength of the recovery. In a statement after its latest policy meeting, the US central bank gave a stronger endorsement of progress in the jobs market, saying it was seeing “solid” gains and that slack in the market had diminished since early this year. - Financial Times

US close

US stocks took confidence from the Federal Reserve's more confident statement released late in Wednesday's session to regain some of the losses from Friday and Monday.

Although the US central bank held interest rates steady, as expected, subtly different language emerging from the Fed suggested to economists and traders that a rate hike is not far away, with a possible September lift-off still on the cards.

The Dow Jones Industrial Average closed up 121.1 points to 17,751.39 by the close, a 0.69% increase, while the S&P 500 gained 15.3 points or 0.73% and the Nasdaq put on 22.5 points or 0.44%.