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The London market was in a bullish mood on Thursday as encouraging earnings and large dividend payouts from some of UK's biggest companies offset lingering worries about rising inflation and Covid-19 cases.
At midday, the benchmark FTSE 100 traded nearly 1% higher at 7,082, led by oil major Royal Dutch Shell, miner Anglo American and pest control company Rentokil Initial.
The more domestically focused FTSE 250 traded 0.3% higher at 23,074. Overnight, US markets finished the day mixed, with the Nasdaq outperforming after the latest Fed decision moved the bond tapering argument onto Jackson Hole next month, while markets in Asia rebounded strongly on reports that China's authorities said that Chinese firms would be allowed to list in the US as long as they met local requirements.
The Dow Jones finished Wednesday down 127 points or 0.36% at 34,930 while the S&P 500 dipped just 0.01% to end the session at 4,400.
The tech-heavy Nasdaq Composite rose 102 points or 0.7% to finish at 14,762, with the small-cap focused Russell 2000 index adding 1.5% to 2,224. In Asia, Japan's Nikkei climbed 0.7% to 27,782, while Hong Kong's Hang Seng jumped 3.3% to 26,315.
MAJOR MARKET MOVERS
Global mining group Anglo American increased its shareholder payout to $4.1 billion, including a $1 billion buyback, after bumper profits for the first six months of 2021. That news saw Anglo's stock surge nearly 5% to £32.75.
Oil company Royal Dutch Shell was up 4.5% to £14.45 on word that second-quarter profit jumped to $5.5 billion, the highest in over two years. That prompted the company to raise its dividend and launch a $2 million share buyback programme.
The day's big losers included healthcare firm Smith & Nephew and BT. The former said it remains on track to meet full-year guidance assuming surgery volumes were not constrained by the pandemic in the second half of the year.
Smith & Nephew reported strong growth in both revenue and operating profit for the first half to 30 June, and it appears that profit taking may be a factor in the stock's weak showing, the shares falling 7.4% to £14.46.
BT has more pressing operating issues to work through. Shares in the communications giant slumped 9% at 167.6p after the group reported a decline in first-quarter profit as weaker performance in its enterprise and global business segments weighed on revenue. It posted a 5.5% decline in revenue of £5.07 billion, slightly below consensus of £5.15 billion.
OTHER BIG STORIES
Lloyds Banking saw its share price run 0.5% higher to 47.01p as it beat expectations with a first-half profit of £3.9 billion. That compared to a loss of £602 million this time a year ago.
Further bad loan provision releases seem to be convincing investors that Lloyds can continue to ride the wave of generally improving conditions.
Defence firm BAE Systems rose more than 3% to 578.5p after increasing its dividend by 5% and bolstering returns with a planned $500 million share buyback. The group expects underlying earnings to grow by between 3% and 5% this year.
Business publisher Relx advanced 2.4% to £20.81 after telling the market that it anticipates revenue and profit growth to be slightly above historical trends. The company also upped its interim dividend by 5% to 14.3p.
On the slide was National Express following falling half year revenue, which eased 3.8% versus 2020 equivalent numbers.
Guinness and Johnny Walker whisky-maker Diageo saw its shares nudge nearly 2% higher to £35.79 after reporting a rise in annual profit. The company pointed to higher sales boosted by growth in its off-trade business that offset pandemic-led weakness in on-trade.
For the year ended 30 June 2021, pre-tax profit rose to £3.7 billion from £2 billion as sales increased 8.3% to £12.7 billion.
Pharmaceutical giant AstraZeneca reported a rise in first-half profit as strong sales in the new medicines and cancer divisions bolstered results.
Accountancy software company Sage saw recurring revenues rise 5% to £1.22 billion in the nine months ended 30 June.
Catering company Compass reported third quarter organic revenue grew by 36.4% amid strong business wins in the quarter.