FTSE surges on back of results announcements

A bumper batch of company results prompted the FTSE 100 Index to test new three-year highs today.

On one of the busiest days in the corporate calendar, strong results performances from Rolls-Royce and AstraZeneca helped lift the Footsie 6.7 points higher to 5270.3 by the close.

The gains came despite Royal Dutch Shell and BT both weakening in the wake of their updates.

Rolls-Royce proved to be the star performer as shares surged by almost 10% in the wake of better-than-expected half-year results.

As well as lifting its dividend by 5%, the engine maker improved profits by 54% and said it had a record £21.9bn (€31.7bn) order book. Rolls shares were among the session’s most heavily traded stocks and stood 30p higher at 342p.

Pharmaceuticals giant AstraZeneca proved to be another stock to watch as it indicated that annual earnings would better guidance set earlier this year.

Investors were also given assurances over the company’s succession plan, as it announced that David Brennan, head of its US and Canada operations, would succeed Tom McKillop, who is to retire in January.

Half-year profits rose to $3.24bn (€2.7bn) as it benefited from good performances by a string of key drugs, sending Astra’s shares nearly 6% higher, up 132p to 2480p.

The post-results reaction at counterpart GlaxoSmithKline was more modest, as shares rose 12p to 1340p following an in-line half-year results performance.

Support services group Capita followed Rolls and Astra to the top of the Footsie risers board, cheering 16p to 365.25p following an 18% hike in first-half profits.

Royal & Sun Alliance was also up 1.5p at 89p after it said it had secured the agreement of workers to close its final salary pension scheme. The move will reduce its UK pension fund deficit by around £126m (€182.5m) after tax.

However, Royal Dutch Shell and BT both lost ground, despite producing figures that were broadly in line with market expectations.

Shell, which made first half profits of £5.84bn (€8.5bn), slipped 31p to 1759p as analysts compared the company’s output and profits with those of its rivals.

And BT dipped 6p to 229p, despite lifting first quarter revenues 5% and underlying profits by 20% to £511m (€740.3m). One analyst described the performance as mixed with impressive revenues growth offset by disappointing earnings.

The fallers board also included Legal & General after the life and pensions company said its growth rate in the UK would slow in the second half of this year, mainly because of tough comparisons with a year earlier. The stock was down 1%, a fall of 1.25p to 114.25p.

Pharmacy group Alliance UniChem was in the red after saying conditions remained difficult at its wholesale business. The stock lost 12.5p to 818p.

The highest Footsie climbers today were Rolls-Royce up 30p to 342p, AstraZeneca rising 132p to 2480p, Capita up 16p to 365.25p and Schroders rising 34p to 839p.

The heaviest fallers were Reed Elsevier off 14.5p to 526p, BT falling 6p to 229p, Hammerson off 16p to 853p and Royal Dutch Shell losing 31p to 1759p.