LONDON: London's FTSE 100 gained on Thursday, as encouraging earnings and huge dividend payouts from some of UK's biggest corporates outweighed worries around rising inflation and COVID-19 cases. The blue-chip index rose 0.6%, led by oil major Royal Dutch Shell, miner Anglo American, and pest control company Rentokil Initial.
Shell jumped 3.9% to be the top boost to the FTSE 100. Its second-quarter profit jumped to $5.5 billion, the highest in over two years, prompting the company to raise its dividend and launch a $2 million share buyback programme.
Global miner Anglo American gained 3.8% after it increased its shareholder payout to $4.1 billion, including a $1 billion buyback, after bumper profits from the first six months of 2021.
Shares of Diageo, communications company BT and medical technology company Smith & Nephew were among the top FTSE 100 losers as their results failed to impress investors.
"Some companies have reported a jump in earnings, but their shares continue to fall because it's just not good enough for the markets; investors want to see stocks beating earnings expectations throughout the board and not just in certain metrics," said Keith Temperton, a sales trader at Forte Securities.
The domestically focussed mid-cap index climbed 0.2%. The FTSE 100 has recovered nearly 41% from its March 2020 lows, supported by dovish central bank policies, although it has largely underperformed the local mid-cap index and wider European market peers on concerns around higher inflation and rising virus cases.
"The UK market has been underowned and unloved for most of the global funds since Brexit and this perception doesn't look to change soon enough," added Temperton. Among other earnings, Lloyd's Banking Group, caterer Compass Group and information provider Relx added 1.0% to 2.5% after reporting strong results.
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