UPDATE 1-Weak earnings hit FTSE 100, Crest warning drags homebuilders

Muvija M and Shashwat Awasthi

* FTSE 100 down 0.3%, FTSE 250 up 0.1%

* Shell dips following Q3 update

* Lloyds also drags on blue-chips

* Crest Nicholson slips after profit warning, drags peers (Adds news items, analyst comment, updates share prices)

Oct 31 (Reuters) - London's FTSE 100 lagged its European counterparts on Thursday as disappointing earnings reports from heavyweights Shell and Lloyds took investor focus away from the U.S. Federal Reserve's third interest rate cut this year.

The main index gave up 0.3%, with its most valued company, Shell, dropping 3.2% after profits plunged and it warned that uncertain economic conditions could slow its $25 billion share buyback.

The domestically focussed FTSE 250 added 0.1% by 0838 GMT, though Crest Nicholson dropped more than 7% after warning its annual profit could plunge by as much as a third.

Crest highlighted hits from weak consumer confidence and flattening prices as a result of Brexit nerves, and shares of blue-chip housebuilders Persimmon, Barratt and Berkeley lost about 1% each.

Lloyds, another blue-chip component, shed 2.2% after missing market expectations for third-quarter earnings.

The FTSE 100 is set to post a loss for only the third month this year as a rally in sterling amid a flurry of Brexit updates - most notably the risk of a 'no-deal' exit subsiding - has hurt exporter stocks in October.

The mid-cap index is on course for its second straight month of gains and investors now brace for a general election in December.

Corporate headlines diverted attention, and perhaps sentiment, away from the Fed's widely-expected interest rate cut. The U.S. central bank did however signal that the latest policy action would be the last for some time.

"That takes December of the table, and we may well see no action until well into Q2 next year if at all. The 'insurance cut' as Chairman Powell put it, makes complete sense in this context," OANDA analyst Jeffrey Halley said.

Gains among mid-caps were led by specialist media services firm Future Plc that jumped 11.5% to its highest since December 2000, following a proposed acquisition of UK-based print and digital magazine publisher TI Media.

Among smaller stocks, property manager Foxtons slid 5.2% after it said volumes and prices in London residential sales were pressured by political uncertainty and hit quarterly revenue. (Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)