Diageo and Shell lifted the British FTSE index to its highest levels in three weeks

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*FTSE 100 up 0.7%.

*FTSE 250 up 0.6%.

* Diageo (LSE: DGE.L – news), Shell (LSE: RDSB.L – news) up after strong results

* Unilever (NYSE: UL – News) Loses After Marking 2019 as ‘Difficult’

Jan 31 (Reuters) – London’s main stock exchange rallied on Thursday, posting gains for a third straight session, helped by upbeat earnings reports from heavyweights Shell and Diageo and the U.S. Federal Reserve’s dovish stance on future interest rate increases.

By 0848 GMT, the FTSE 100 index was up 0.7 percent to its highest level in almost three weeks, while the mid-cap index was up 0.6 percent to its highest level since November last year.

Blue chips achieved their best monthly result since April last year.

Good sentiment on European stocks followed Asia, where shares rebounded to a four-month high after the Federal Reserve vowed to be patient with further interest rate increases, signaling a potential end to the tightening cycle amid signs of a slowdown. global growth.

But domestic uncertainty was growing in Britain, with the European Union’s chief Brexit negotiator saying there was too little time to find an alternative to the Irish border arrangements agreed in the divorce deal, as London wants.

With the March 29 exit date fast approaching, a slim majority in the British Parliament this week instructed Prime Minister Theresa May to return to Brussels to exchange Irish border arrangements.

The EU immediately reiterated that the deal was not subject to renegotiation.

At the top of the FTSE 100 index, Diageo, the world’s biggest spirits company, gained almost 4 percent after reporting higher half-year sales thanks to sales growth in India and China.

Oil major Shell, the most valued company in the FTSE 100, was close behind after reporting a 36% profit growth in 2018, beating forecasts, thanks to cost savings.

Water companies United Utilities (LSE: UU.L – news) and Severn Trent (Other OTC: STRNY – news), which rose 2.8% and 2.5% respectively after UK water regulator Ofwat greenlighted their five-year business plans.

Shares (Berlin: DI6.BE – news) of telecommunications giant BT and Unilever (Amsterdam: UZ8.AS – news) fell after the companies announced results, significantly underperforming the main index.

“The commentary on uncertainty, including Brexit, leaves open the possibility of a more challenging 19/20 financial year,” Jefferies analysts wrote about BT.

Asset manager Standard Life Aberdeen fell 3.2 percent following Morgan Stanley’s (Xetra: 885836 – news) downgrade to the same weight.

RPC (NYSE: RES – News) rose 4.6 percent and was among the top gainers on the mid-cap index after U.S. company Berry Global said it was considering a possible cash offer for the packaging maker in connection with with £3.3 billion ($4.33 billion) from Apollo Global Management. agreement. (Reporting by Muvija M in Bengaluru; Editing by Josephine Mason (Shenzhen: 002654.SZ – news))