The UK’s index of blue-chip shares regained ground in early afternoon trading after late morning drift as investors await update from US Federal Reserve.
As well as continuing concerns about inflation, investors are worried about the rising number of Delta variant cases and the repercussions of China's latest clampdown on tech and other private sector businesses.
At 12.30pm, the benchmark FTSE 100 was trading 0.2% higher at 7,010.28, just about keeping its head above the 7,000 level. Mid-caps were far stronger with the FTSE 250 ahead 0.7% at 23,044.73.
In Asia, Chinese stocks remained at their lows for the year after three days of heavy losses despite state-run media channels urging investors to remain calm.
Oil prices were steady after US inventory data showed a bigger than expected drawdown last week, with Brent futures trading at $74.68 per barrel. Gold kept its head above the $1,800 level, gaining 0.3% to $1,806 per ounce.
MAJOR STOCK MOVERS
GlaxoSmithKline (GSK) reflected the market’s mixed mood with its share price staying largely flat at £13.944 even after the pharmaceuticals and consumer products group beat forecasts for its second quarter results.
The company, under pressure from an activist investor and planning to spin-off its consumer business, said revenues rose 6% to £8.09 billion in an update issued at midday on Wednesday, while operating profits jump 23% to £2.15 billion.
Cigarette maker British American Tobacco (BATS) posted strong first half results on a constant currency basis with sales up 8.1% to £12.17 billion helped by a 50% increase in ‘new categories’ as more customers switched to non-combustible products.
Sales of vaping products were up 59% with its Vuse brand ‘approaching global category value share leadership’, helping to reduce new category losses.
The shares drifted 1% lower to £27.445.
Mining giant Rio Tinto (RIO) slipped 0.65% to £60.02 despite reporting a surge in underlying profits for the first half from $4.75 billion to £12.17 billion thanks to average iron ore prices more than doubling in the last year on Chinese infrastructure spending and supply issues in Brazil.
The firm is returning $9.1 billion of cash to investors through an ordinary dividend of $3.76 per share and a special payment of $1.85 per share, which represents 75% of first half earnings.
High-street lender Barclays (BARC) was a standout performer, the stock rallying 2.8% to 174.19p after it posted first half group income of £11.3 billion, down 3% on last year due to the fall in the US dollar. Excluding currency swings, the firm said group income would have been up on 2020.
The investment banking business was once more the main contributor with £6.6 billion of income, although the fixed-income division under-performed again. The UK retail and commercial arm delivered £3.2 billion of income thanks to strong mortgage demand on the back of the booming housing market.
Shares in broadcaster ITV (ITV) lost earlier gains to slide 1% to 117.85p after the firm reported a 27% jump in first half revenues to £1.55 billion and a 98% increase in operating profits thanks to a strong recovery in the advertising market.
The company also committed itself to restarting a ‘progressive’ dividend policy based on a notional dividend of 5p per share which it expects to grow over time.
Packaging firm Smurfit Kappa (SKG) posted solid half year results, with revenues up 11% to €4.68 billion and operating profits up 6% to €477 million, and announced it had acquired various assets in Italy, Mexico and Peru to expand its business.
The shares traded marginally higher at £41.04.
MID- AND SMALL-CAP NEWS
Shares in property and industrial group Hargreaves Services (HSP) saw earlier 3% gains wiped out even after the firm posted full year pre-tax earnings of £17.7 million against £2.1 million the previous year, helped by a sizeable contribution from its German operations.
The stock was more than 1% off at lunchtime at 472.5p.
Aston Martin Lagonda (AML) posted first half revenues of more than three-times the same period last year at £499 million thanks to a 224% increase in unit sales to 2,901, of which more than half were £160,000 DBX sports-utility vehicles.
That saw the stock gain 1%, albeit losing earlier heavier gains, to trade at £19.025.
The firm also said it had rebalanced supply of its GT/sport models in Q1, ahead of its forecast, and deliveries of the £2.5 million Valkyrie hybrid supercar were on track for the second half.
The company said that assuming no material supply chain or Covid related impacts in the second half, pre-tax profits for the year would be ‘materially ahead’ of its previous expectations.
Healthcare real estate investment company Primary Health Properties (PHP) reported a small increase in first half revenues to £67.7 million and a 13% rise in profits to £40.7m as it benefitted from rent increases and a reduced cost base. Shares added 2% to 164p.
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