FTSE 100 shares round-up: Diageo, Rolls-Royce, Rio Tinto, Aviva

Photo: Dave Benett/Getty Images for PIMM’s.

A record-breaking session by the FTSE 100 index today felt far from euphoric, despite Rio Tinto  Ordinary Shares (LSE:RIO) dividend cheer and results-day recoveries by Reckitt Benckiser Group (LSE:RKT) and Weir Group (LSE:WEIR).

The blue-chip benchmark followed Tuesday’s 0.8% rise by setting an intraday high of 10,951.06 in the opening minutes of trading but then retreated to stand broadly unchanged at 10,896.52.

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The performance mirrored S&P 500 index futures ahead of tonight’s Federal Reserve policy announcement and post-bell releases by hyperscalers Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc Class A (NASDAQ:META).

Heavyweight fallers in the FTSE 100 included International Consolidated Airlines Group SA (LSE:IAG) after fresh Middle East tensions caused the price of Brent crude to lift 3% to above $87 a barrel.

Drinks giant Diageo (LSE:DGE) also weakened 44.5p to 1627.5p after Deutsche Bank removed its Buy stance following a 22% advance for shares since the end of March and 11% outperformance versus the wider European food and beverage sector.

With full-year results and a strategy update due on 6 August, the bank sees a broad range of potential outcomes with greater downside than upside risk: “We continue to believe consensus expectations for both 2026-27 and beyond remain materially too optimistic.”

Rolls-Royce Holdings (LSE:RR.) fell 20.4p to 1,399p ahead of tomorrow’s interim results, while Aviva (LSE:AV.) slipped back from its two-decade high territory with a decline of 10.2p to 682p.

In support of the FTSE 100, Rio Tinto rose 181p to 7,046p after the Melbourne-based miner announced a 43% uplift in its interim dividend to 211 US cents (158.7p) a share.

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The payout was consistent with Rio’s established practice of paying 50% of half-year underlying earnings per share, which in today’s results rose 42% to 421.4 US cents.

Morgan Stanley said the dividend, which is due to be paid on 24 September, beat expectations by 3-4% after earnings benefited from a fall in Rio’s effective tax rate to 25.2% from 34.5% the year before. This figure is expected to return to about 30% in 2027.

The bank highlighted the standout performance of Rio’s copper operations, which beat earnings estimates by 8-9% amid the support of better margins at its Oyu Tolgoi and Escondida mines.

This was offset by misses in iron ore, aluminium and lithium as an overall 28% hike in earnings to 14.8 billion US dollars came in 2% below the company-compiled consensus.

Stronger commodity prices drove the uplift, led by benchmark prices for copper up 39%, gold 53% higher and aluminium up by a third, alongside resilient iron ore prices.

The results showed that more than half of earnings came from copper, aluminium and lithium as Rio builds exposure to trends such as energy demand for electrification and AI.

Chief executive Simon Trott said the group achieved a step-change in performance, which alongside favourable commodity prices delivered a 75% rise in free cash flow. He added that productivity benefits are on track to reach an annualised run-rate of $1.8 billion by the year-end, with “significantly more to come as our multi-year programme continues to scale”.

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The FTSE 100 risers board featured recoveries by two companies whose shares were among the most impacted by the Middle East conflict in the first half of the year.

Reckitt Benckiser rose 208p to its highest level since April at 5,384p after the Dettol, Finish and Harpic business posted core like-for-like net revenues growth of 4.2% in the second quarter.

This was much better than the 3.6% City consensus after Reckitt’s emerging markets division was boosted by double-digit growth in China and a strong performance in India. Reckitt’s Middle East business stabilised following the initial ceasefire in the region.

The successful mitigation of increased commodity costs linked to the conflict meant a 100 basis points drop in operating margin to 23.6% also came in better than City forecasts.

Reckitt reiterated full year guidance, which includes a return to like-for-like revenue growth in Europe in the second half alongside a continuation of broad-based growth in emerging markets.

It announced a new share buyback plan worth £500 million over the next 12 months, having returned £6.4 billion to shareholders since 2024. The interim dividend, which is due to be paid on 18 September, has been increased by 5% to 88.6p a share.

Weir shares rose 172p to 2,696p after the mining industry supplier of equipment and spares reported a faster-than-expected acceleration in its second-quarter performance.

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The shares are still below their 2026 starting point after falling from 3,536p prior to the start of the Middle East war in late February to 2,274p in mid-June.

The company boosted confidence today as it said year-to-date original equipment orders increased by 10% on a constant currency basis against a strong prior year, while aftermarket orders lifted 8%.

Jon Stanton, who is standing down as chief executive after 10 years in the role, said Weir started the second half with a large order book, a strong demand backdrop and good pipeline visibility.

He added: “The long-term value creation opportunity for Weir remains compelling.

“The fundamentals for our business are highly attractive, underpinned by long-term structural growth trends in our mining markets, and our technology strategy to accelerate sustainable mining in both hardware and software.”

An interim dividend of 20p a share is due to be paid on 3 November, representing a 2% increase on a year earlier and reflecting the company’s confidence that it will achieve good growth in underlying earnings per share over the full year.

Adjusted profits dropped 8% to £196 million in the first half after gross margins were impacted by the unusual demand mix seen in the first quarter and slight delays in operational savings, both of which are expected to reverse in the second half.