UK stocks got off to a mixed start on Wednesday as better corporate earnings were outweighed by weak overnight performances in the US and Asia.
US markets gave back some of their recent gains as heavyweight tech stocks Alphabet, Apple and Microsoft dipped despite strong earnings.
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 $74.50 per barrel. Gold kept its head above the $1,800 level, gaining 0.3% to $1,806 per ounce.
By 9am the FTSE 100 index was flat at 6,999 points with gains in banks and hospitality stocks offset by weakness in miners and stocks with large overseas exposure.
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. Shares were flat at £27.71.
Mining giant Rio Tinto (RIO) reported 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. Despite the positive news, shares eased 0.8% to £59.95.
High-street lender Barclays (BARC) was the star of the show, with shares rallying 5% to 178p 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) climbed 2% to 122p 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. Shares traded sideways at £40.58.
MID- AND SMALL-CAP NEWS
Shares in property and industrial group Hargreaves Services (HSP) climbed 3% to a new year high of 496p 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.
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.
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. Shares revved 3% higher to £19.32.
The company said that assuming there were 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.
FOR A LIST OF FTSE 100 RISERS AND FALLERS SEE HERE