Market news you need to know

The sun's out, but it's like the last day on earth in the City, such is the deluge of companies reporting results, takeovers and corporate activity. And there are some great stories around Thursday, the best of which we'll cover here.

It was only a few months ago that Rolls-Royce looked dead and buried. In February, after a series of profits warnings, we reported the first cut in the dividend in quarter of a century. Today's interim dividend is halved to 4.6p.

But full-year results were better-than-expected and shares in the iconic aerospace and defence engineer rallied 16% then. And they've pulled the same trick at the half-year stage. We were told a month ago that business was going well and that this year would be significantly weighted toward the second-half.

Says chief executive Warren East: "Order intake has been good and…the business remains well positioned to deliver a solid second half performance supported by growth in engine deliveries, stronger aftermarket revenues and incremental benefits from our ongoing restructuring programmes."

It needs to be following a 5% drop in first-half revenue to £6.1 billion and 80% plunge in underlying pre-tax profit to £104 million. Add in a £2.2 billion currency hit since the pound dived post-Brexit and Rolls actually lost £2.15 billion in the six months to 30 June.

However, East's optimism - which we shared back in February when he talked up Rolls' transformational programme - has been well-received and the shares have surged 76% from February's six-year low to a 12-month high. They're now within a whisker of the 50% retracement from the January 2014 high near £13.

Royal Dutch Shell has prospered in recent months, too. Oil prices doubling to over $52 a barrel and progress in both asset sales and integration of BG Group got investors excited. Its shares topped £21 for the first time since May 2015 and still yields 7%.

But oil prices are falling again, and second-quarter results missed expectations. Investors sitting on fat profits needed little encouragement to bank them. Clean current cost of supplies (CCS) earnings of just over $1 billion (£761 million) was down 72% year-on-year and less than half the figure demanded by the City.

Shell's upstream (oil exploration) and corporate divisions get the blame; the former lost over $1.3 billion in the second quarter, hit by low oil prices, while the latter took a big stamp duty charge on the BG acquisition.

There was no rush for the exit among miners Thursday. Anglo American has had an absolute blinder in 2016 - demand concerns have diminished, its asset sale has gone well, and there were rumours that Anglo has attracted a potential suitor.

Self-help has offset lower metals prices and losses narrowed significantly in the first half of 2016, down to $364 million from $1.9 billion a year ago. Net debt is down sharply, too, and will likely drop below $10 billion by the end of this year.

Far from peaking, Anglo shares shot up again on the news, taking the increase since January back to fourfold! Clearly, there's better value elsewhere in the sector, but do not right Anglo off, especially if we see any depreciation in the dollar.

Technical analyst Alistair Strang told us this week that BT shares must hit 432p to rule out a drop to 309p. And, just days after industry regulator Ofcom said it would not insist BT's Openreach division be broken up, the telecoms giant has flagged up a strong first quarter.

Cash profit jumped by 25% to £1.8 billion, boosted by a £281 million contribution from mobile phone giant EE, bought by BT for £12.5 billion. Adjusted pre-tax profit rose 16% to £802 million. Like CEO Gavin Patterson says, it’s a "good start to the year" and BT is "on track to deliver our full year outlook".

BT is still cheap, reckons UBS, and these results should "nudge" the shares higher and the Openreach overhang is receding. But keep an eye on the big pension deficit and competition concerns.

BT's TV rival Sky chipped in with annual results that made the market happy. Earnings per share rose a better-than-expected 13% in the year ended 30 June to 63.1p. It thinks revenue with grow 5-7% in 2017 and save £200 million a year, rising to £400 million by 2020.

Up sharply in the past month, but still only trading on less than 15 times forward earnings, Numis Securities upgrades Sky shares to 'buy' with 1,250p price target.

Elsewhere, a potential bid battle over electronic components distributor Premier Farnell has broken out. A month after bosses agreed a 165p per share offer from Swiss manufacturer Datwyler, one of the world's largest distributors Avnet has tabled a deal worth 185p. That extra 12% for Premier shareholders is why management has ditched the Swiss deal and backed the Americans instead.

JD Sports, a long-time Interactive Investor favourite, continues to rebound from a post-Brexit mauling. The tracksuits and trainers chain said full-year profit would be in the top half of expectations for £170-£190 million. We get a half-year update on 13 September.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.