6th Aug 2026 12:15
(Alliance News) - Stock prices in London were higher at midday on Thursday, with strong earnings from Diageo helping the FTSE 100 overcome pressure from a number of heavyweight stocks trading ex-dividend.
Investors also assessed signs that the UK construction downturn is easing and weaker-than-expected eurozone retail sales.
The FTSE 100 index was up 27.10 points, 0.3%, at 10,915.40. The FTSE 250 was up 44.79 points, 0.2%, at 24,677.42, and the AIM all-share was up 2.62 points, 0.3%, at 784.40.
The Cboe UK 100 was up 0.2% at 1,083.88, the Cboe UK 250 was up 0.5% at 21,498.92, and the Cboe small companies was up 0.2% at 18,779.12.
Fresh survey data showed the UK's construction sector remained under pressure in July, although the pace of contraction eased markedly.
The S&P Global UK construction purchasing managers' index rose to 44.7 in July from 38.4 in June, its highest level in four months and comfortably above the FXStreet-cited consensus of 41.5.
However, it remained below the 50-point threshold that separates growth from contraction, extending the sector's downturn to a seventh consecutive month.
All three major construction sectors recorded slower declines. Commercial activity proved the most resilient with a reading of 46.8, while housebuilding contracted at its slowest pace since October 2025 at 41.8. Civil engineering remained the weakest area at 38.3.
New orders also declined for a seventh consecutive month, though at the slowest pace since September 2025.
Firms reported improving tender opportunities across commercial, residential and transport infrastructure projects, although geopolitical uncertainty and subdued domestic economic conditions continued to weigh on demand.
The pound was quoted at USD1.3459 at midday Thursday, compared with USD1.3466 at the London equities close on Wednesday. Against the euro, sterling edged lower to EUR1.1661 from EUR1.1663.
The euro traded at USD1.1542, slightly below USD1.1545 late Wednesday, while the dollar strengthened marginally to JPY157.85 from JPY157.58.
Back in London, Diageo led the FTSE 100, jumping 6.4% after publishing annual results late on Thursday morning and outlining a new medium-term growth strategy.
The drinks maker reported a 3.0% decline in annual net sales to USD19.64 billion and a 23% fall in net profit to USD1.96 billion, with pretax profit falling to USD2.56 billion from USD3.54 billion. Results were hit by USD1.5 billion of impairment charges related to Turkey.
Organic net sales fell 2.0% overall. North American sales declined 8.4%, while Asia Pacific sales dropped 6.3%. Europe returned to growth with a 3.4% increase, helped by Turkey and Great Britain, while Latin America recorded 7.7% organic growth.
Diageo highlighted the continued strength of Guinness, saying Guinness 0.0 is now the number one non-alcoholic beer in Great Britain, with both volumes and net sales growing at double-digit rates.
Looking ahead, the company expects broadly flat organic net sales growth in financial 2027, followed by low-single-digit annual organic revenue growth through to 2029.
It is targeting more than USD1 billion of cost savings over the next three years, cumulative free cash flow of around USD8 billion between financial 2027 and 2029, and earnings per share growth ahead of organic operating profit growth.
Elsewhere on the blue-chip index, Admiral Group rose 4.0% after saying it expects a stronger second half as higher motor insurance prices feed through into earnings.
Persimmon added 3.6% after reporting double-digit growth in first-half revenue and pretax profit while maintaining its full-year outlook.
At the bottom of the FTSE 100, Tritax Big Box REIT fell 4.1% after completing a GBP350 million equity fundraise. Relx lost 2.3%, while Segro fell 1.7% and St James's Place slipped 1.3%, with all three trading ex-dividend. Polar Capital Technology Trust was down 2.0%.
In the FTSE 250, WPP surged 24% after reporting better-than-expected interim results.
Harworth Group climbed 20% as it continued to review a cash takeover proposal from Peel Pepper.
OSB Group slumped 13% after warning persistent funding cost pressures could weigh on future returns, while Wizz Air fell 4.8% after swinging to a quarterly net loss.
Among smaller companies, Wellnex Life advanced 69% after agreeing to sell its Pain Away business.
Devolver Digital tumbled 64% after proposing to delist from AIM.
Time Out was up 4.0% on AIM.
The London-based global media and hospitality business announced plans to open its first UK food market in London's West End in 2028.
In Europe, the CAC 40 in Paris rose 0.6%, while Frankfurt's DAX 40 gained 0.1%.
Eurozone retail sales disappointed in June, according to Eurostat.
Retail sales volumes fell 0.3% month-on-month after a revised 0.4% increase in May, missing expectations for a 0.1% rise. Annual retail sales growth slowed to 0.7% from 1.9%, also below consensus.
Sales of food, drinks and tobacco increased, but volumes of automotive fuel sold through specialised stores dropped sharply.
Oil prices edged higher despite continued diplomatic efforts surrounding the Strait of Hormuz.
Brent crude traded at USD80.14 a barrel at midday Thursday, up from USD78.88 late Wednesday.
Iran said it had agreed with Oman on a shipping route through the Strait of Hormuz and was finalising arrangements for jointly managing the strategic waterway. However, Iranian officials reiterated that any reopening still depends on the US ending what Tehran regards as its naval blockade of Iranian ports.
While US President Donald Trump has repeatedly said Iran is eager to reach an agreement, Tehran insists it is negotiating only with Oman over shipping arrangements rather than directly with Washington.
Stocks in New York were called mixed. The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 0.2%, and the Nasdaq Composite down 0.4%.
The yield on the US 10-year Treasury was quoted at 4.63%, unchanged from Wednesday. The yield on the US 30-year Treasury was quoted at 5.18%, widening from 5.17%.
Separately, UK Foreign Secretary Ed Miliband announced a fresh package of sanctions against Russia targeting 19 individuals and entities.
The measures include sanctions on six Russian banks, six shadow fleet tankers and four companies involved in importing tantalum and niobium, rare metals used in military equipment.
The announcement followed talks between Miliband and US Secretary of State Marco Rubio on further support for Ukraine.
Gold traded at USD4,267.62 an ounce at midday, up from USD4,255.64 on Wednesday.
Still to come on Thursday's economic calendar are US weekly jobless claims and wholesale inventories.
By Eva Castanedo, Alliance News senior economics reporter
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