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(Alliance News) - Stock prices in London opened slightly higher on Thursday shrugging off heightened tensions between the US and China, while Unilever surged on high demand for its hygiene products amid the Covid-19 pandemic.
In London, the FTSE 100 index was up 16.39 points, or 0.3%, at 6,223.49. The mid-cap FTSE 250 index was up 12.76 points, or 0.1%, at 17,478.49. The AIM All-Share index was flat at 888.98.
The Cboe UK 100 index was up 0.2% at 619.68. The Cboe 250 was flat at 14,848.10, and the Cboe Small Companies was up 0.1% at 9,182.11.
In mainland Europe, the CAC 40 in Paris was up 0.3%, while the DAX 30 in Frankfurt was up 0.4%.
US-China relations deteriorated once again on Wednesday as Washington ordered the closure of the Chinese consulate in Houston within 72 hours. Relations were already tense over the coronavirus pandemic and Beijing's crackdown in Hong Kong.
China slammed the US move, which came one day after the unveiling of a US indictment targeting two Chinese nationals for allegedly hacking hundreds of companies worldwide and seeking to steal virus vaccine research.
US President Donald Trump threatened more consulate closures, telling reporters "it's always possible".
In Beijing, Chinese foreign ministry spokesman Wang Wenbin said the order to close the consulate was an "outrageous and unjustified move which will sabotage China-US relations."
In China, the Shanghai Composite ended down 0.3%, while the Hang Seng index in Hong Kong is up 0.7%. Financial markets in Japan are closed for Marine Day.
On the London Stock Exchange, Unilever was the best blue-chip performer, up 7.0% after the Anglo-Dutch consumer goods firm maintained its dividend and said the effects of Covid-19 has varied widely across all its channels, regions and categories.
The maker of Dove soap and Domestos household cleaner said it increased its hand sanitiser capacity by 600 times across several brands and rolled out its Lifebuoy hygiene brand to more than 50 markets.
For the half-year ended June 30, revenue was EUR25.71 billion, down 1.6% from EUR26.13 billion the year before, but pretax profit rose 4.1% to EUR4.53 billion from EUR4.35 billion.
Unilever maintained its quarterly shareholder dividend at EUR0.4104 per share.
In addition, Unilever said that after exploring sale options for its tea business, it had decided to keep its operations in India and Indonesia and partnership interests in ready-to-drink tea joint ventures. The rest of the tea business will be separated into an independent entity, the Lipton and PG Tips maker added.
"The balance of Unilever's tea brands and geographies and all tea estates have an exciting future, and this potential can best be achieved as a separate entity. A process will now begin to implement the separation, which is expected to conclude by the end of 2021," the company said.
Interactive Investor's Richard Hunter commented: "Overall, Unilever's strong performance and the period and an increasingly focused strategy has led to a sigh of overdue relief from investors. This may also help to simplify what has been a complicated performance of the shares, as expectations have not been met in the recent past."
Ad agency WPP was up 3.5% following positive earnings from French peer Publicis Group, which said it has strong fundamentals to weather the coronavirus crisis. Publicis added that it continued to record significant wins in new business across the world, such as Sephora in North America, McDonald's in China and Francaise des Jeux in France.
For the half-year to June 30, Publicis said revenue rose by 9.7% to EUR5.28 billion from EUR4.87 billion last year. EBITDA rose to EUR923 million from EUR885 million.
Publicis shares were up 15% in Paris.
Gold miners Fresnillo and Polymetal International were up 3.8% and 2.6% respectively, tracking spot gold prices higher.
Gold was priced at USD1,875.70 an ounce early Thursday, up from USD1,861.40 an ounce at the London equities close Wednesday. The precious metal was trading at its highest levels since 2011.
At the other end of the large-cap index, SSE was the worst performer down 5.5% after the stock went ex-dividend meaning new buyers no longer qualify for the latest payout.
RELX was down 5.0% after the Anglo-Dutch information, events and analytics firm posted lower interim revenue and profit as its exhibitions business was significantly dented by Covid-19.
For the half-year ended June 30, revenue fell 10% to GBP3.50 billion from GBP3.89 billion the year before and adjusted pretax profit dropped 25% to GBP858 million from GBP1.14 billion.
RELX highlighted that its Exhibitions unit, which accounted for 16% of revenue and 13% of adjusted operating profit in 2019, has been hurt significantly by Covid-19, as the pandemic forced countries to block public events and gatherings.
In the Exhibitions arm, first-half revenue of GBP201 million was less than a third of GBP684 million last year, and the business swung to an adjusted operating loss of GBP117 million from a profit of GBP231 million.
The outlook for the remainder of 2020 for Exhibitions remains highly uncertain, RELX added.
The pound was quoted at USD1.2741 Thursday morning, firm from USD1.2731 at the London equities close Wednesday.
The latest round of negotiations between teams led by the EU's Michel Barnier and UK Prime Minister Boris Johnson's Europe adviser David Frost will conclude on Thursday.
Number 10 played down the prospect of an imminent collapse in negotiations, with insiders saying the talks were "neither at a breakthrough nor a breakdown". But the Daily Telegraph earlier this week reported that the government's working assumption is that Britain will trade with Europe on World Trade Organisation terms - without a UK-EU deal - after the transition period ends on December 31.
The euro stood at USD1.1584, flat from USD1.1585. Against the yen, the dollar was trading at JPY107.15, flat from JPY107.17.
Brent oil was quoted at USD44.36 a barrel Thursday morning, up from USD43.72 a barrel at the London equities close Wednesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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