London close: BAT bounce offsets Shell slide as stocks edge up
London stocks sweated out a small gain on Thursday as investors mulled the apparent progress made at the trade meeting between US President Trump and EU Commission President Jean-Claude Juncker a day earlier and fought through a barrage of earnings reports, with oil giant Shell under the cosh after its second-quarter numbers.
The US-EU meeting in Washington on Wednesday yielded some progress as the US agreed to work towards lowering trade barriers with the EU. The two sides said they would work towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto goods. In addition, they agreed to up trade in services and agriculture, which include greater US soy bean exports to the EU.
However, the breakthrough was not enough to give much of a boost London's stock market, with the FTSE 100 adding just 4.91 points or 0.06% to 7,663.17 by the close, as the pound slipped back 0.5% against the dollar to 1.3121 and was flat versus the euro at 1.1252.
"The FTSE 100 has been unceremoniously left out of the general ex-tech rebound in global markets," said Chris Beauchamp, chief market analyst at IG. "Having escaped much of the trade war volatility earlier this year, the downside of this is that when the rebound comes, as it has today, the index remains unloved. Still, it has managed to claw back its losses as the session winds down, even if it is still unable to move on above 7700."
Oil prices were slightly higher, with Brent up 0.8% to $74.51 a barrel. "Oil is off the lows of the month and Iran is still at the forefront of traders’ minds as the US has sanctions lined up for the major oil exporter," said market analyst David Madden at CMC Markets. "Tensions in the Middle East are high after the Yemeni Houthi militia attacked Saudi Arabian tankers yesterday, and this has prompted fears about supply."
In spite of this, Royal Dutch Shell shares were giving off a red heat as even a $25bn (£19bn) share buyback was not enough to impress investors after the oil giant's second-quarter profit being well below forecasts. Earnings rose less than expected in all segments, particularly upstream and oil products.
Elsewhere in the resources sector, Anglo American fell after it reported a drop in first-half profit, while KAZ Minerals climbed higher as it increased copper production 18% in the first half.
Compass was on the back foot even as the catering group posted a rise in third-quarter revenue and backed its full-year expectations, while asset manager Schroders slipped after reporting an increase in first-half pre-tax profit and assets under administration and net inflows and lifting interim dividend by 3%.
Security software company Sophos was weaker as it said earnings in the first quarter were hit by slow billings growth and higher costs.
Drinks maker Diageo was hit by profit taking even as it unveiled a fresh £2bn share buyback and said annual operating profit rose 3.7%.
Johnson Matthey lost ground after saying first-quarter sales were in line with its expectations and reaffirming its full-year guidance, while Cobham was under the cosh after saying it will book at £40m charge in the first half over a dispute with Boeing over its refueling programme.
Intu Properties was trading lower as it announced the departure of chief executive officer David Fischel and said it had experienced a "resilient" first-half performance in a challenging market.
On the upside, British American Tobacco was smoking hot on the back of its first-half numbers, while Smith & Nephew and AstraZeneca rallied on the back of their interims.
Sky ticked up posted 9% jump in full-year core earnings, while Relx advanced after it said net profit and revenue in the first half fell but reiterated its outlook, and engineer Vesuvius surged as it posted a jump in first-half profit and revenue.
Halfords, Royal Mail and SSE were among the companies whose stock went ex-dividend.
In broker note action, Beazley was upgraded to 'buy' at Berenberg, Drax was lifted to 'add' at AlphaValue and Ferrexpo was boosted to 'hold' by Liberum.
Hammerson was cut to 'equalweight' at Morgan Stanley, Informa was downgraded to 'hold' at Kepler Cheuvreux and ASOS was reduced to 'sell' at Investec.
Market Movers
FTSE 100 (UKX) 7,663.17 0.06%
FTSE 250 (MCX) 20,768.61 0.07%
techMARK (TASX) 3,566.19 0.41%
FTSE 100 - Risers
British American Tobacco (BATS) 4,177.00p 5.13%
AstraZeneca (AZN) 5,796.00p 4.19%
Croda International (CRDA) 5,074.00p 3.15%
Smith & Nephew (SN.) 1,361.00p 3.03%
Evraz (EVR) 550.00p 2.38%
International Consolidated Airlines Group SA (CDI) (IAG) 681.20p 2.37%
Ashtead Group (AHT) 2,361.00p 2.34%
Micro Focus International (MCRO) 1,310.50p 2.30%
Relx plc (REL) 1,713.00p 2.09%
Just Eat (JE.) 883.40p 1.54%
FTSE 100 - Fallers
SSE (SSE) 1,260.00p -5.86%
Schroders (SDR) 3,089.00p -4.13%
ITV (ITV) 165.30p -3.90%
Royal Dutch Shell 'B' (RDSB) 2,626.50p -3.61%
Royal Dutch Shell 'A' (RDSA) 2,576.00p -3.05%
Compass Group (CPG) 1,606.00p -2.28%
Fresnillo (FRES) 1,003.00p -2.15%
Ocado Group (OCDO) 1,121.50p -2.14%
Informa (INF) 801.60p -1.76%
Royal Mail (RMG) 467.50p -1.25%
FTSE 250 - Risers
Vesuvius (VSVS) 621.00p 6.70%
National Express Group (NEX) 421.00p 5.57%
Ferrexpo (FXPO) 190.40p 5.08%
Cineworld Group (CINE) 270.60p 4.08%
Daejan Holdings (DJAN) 6,400.00p 4.07%
Clarkson (CKN) 2,535.00p 3.47%
RHI Magnesita N.V. (DI) (RHIM) 4,802.00p 3.27%
esure Group (ESUR) 198.60p 3.17%
Bank of Georgia Group (BGEO) 1,824.00p 3.06%
Energean Oil & Gas (ENOG) 530.00p 2.71%
FTSE 250 - Fallers
Sophos Group (SOPH) 470.00p -10.13%
Cobham (COB) 118.60p -9.88%
Intu Properties (INTU) 165.00p -8.31%
Howden Joinery Group (HWDN) 484.70p -5.63%
Hammerson (HMSO) 500.80p -5.33%
Halfords Group (HFD) 335.00p -4.61%
Capital & Counties Properties (CAPC) 269.50p -4.53%
Alfa Financial Software Holdings (ALFA) 160.60p -3.95%
Lancashire Holdings Limited (LRE) 549.00p -3.94%
Ascential (ASCL) 408.00p -3.64%