By Kit Rees
LONDON (Reuters) - A drop in heavyweight oil stocks weighed on the UK's top share index, which failed to join a broader rally across European stocks on Thursday as U.S.-EU trade tensions thawed.
The blue-chip FTSE 100 (FTSE) index was down 0.1 percent at 7,652.74 points by 0900 GMT, while mid caps (FTMC) were flat in percentage terms.
Even though a breakthrough in trade talks between the European Union and the United States spurred risky assets higher globally, earnings reports and the ensuing share price moves dominated the action on the FTSE.
Shares in Royal Dutch Shell (L:RDSa) fell 2.2 percent after the oil giant reported second-quarter profits sharply below expectations, overshadowing the launch of a long-anticipated $25 billion share buyback programme.
"As good as the news from Shell is, very strong Q2 profit growth ... thanks to higher oil prices, still missed expectations," Mike van Dulken, head of research at Accendo Markets, said.
The energy sector was the biggest weight on the FTSE, taking more than 22 points off the index.
Results also knocked asset manager Schroders (L:SDR), which fell 3.7 percent and was among the biggest fallers as investors focused on Schroders' lacklustre client flows even though its first-half pretax profit beat forecasts.
SSE (L:SSE) was the biggest faller, down 5.7 percent after going ex-dividend.
On the positive side, consumer staples limited losses as a slew of earnings updates sent shares in heavyweights British American Tobacco (L:BATS), Relx (L:REL), Smith & Nephew (L:SN) and AstraZeneca (L:AZN) to the top of the index.
British American Tobacco's shares jumped 5.3 percent and were set for their best day since 2009 after the tobacco company's first-half results beat expectations with sales jumping 57 percent.
"A solid print with a number of positives: robust organic sales; margin gains; encouraging commentary for the second half and full year EPS delivery; and an EPS beat," analysts at Jefferies said in a note.
Demand for products to detect online fraud gave Relx's first-half revenue a boost, with shares in the information provider rising 3.9 percent. A recovery in its U.S. market helped Smith & Nephew's revenues in the second quarter.
AstraZeneca's shares were up 2.6 percent after it said new drugs performed strongly in the second quarter, buoying hopes for better times ahead.
All was not so rosy for mid cap Cobham (L:COB), whose shares tanked nearly 10 percent after the engineering group said it would take an additional charge on its work on Boeing's KC-46 tanker programme.