* FTSE 100 ends little changed
* Shell falls after Q2 disappoints
* But BATS, Relx, Smith & Nephew gain after updates (Adds closing prices)
By Kit Rees
LONDON, July 26 (Reuters) - A drop in heavyweight oil stocks weighed on the UK’s top share index, which lagged a broader rally across European stocks on Thursday as U.S.-EU trade tensions thawed.
The FTSE 100 index ended up 0.06 percent at 7,663.17 points, while mid-caps also ended broadly flat.
Even though hopes of 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 fell 3 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 29 points off the index.
Results also knocked asset manager Schroders, which fell 4.1 percent as investors focused on its lacklustre client flows even though its first-half pretax profit beat forecasts.
On the positive side, consumer staples lent support to the FTSE as a slew of earnings updates lifted shares in heavyweights British American Tobacco, Relx, Smith & Nephew and AstraZeneca.
British American Tobacco’s shares jumped 5.1 percent, scoring their best day since March 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 2.1 percent. A recovery in its U.S. market helped Smith & Nephew’s revenues in the second quarter.
AstraZeneca’s shares rose 4.2 percent after it said new drugs performed strongly in the second quarter, buoying hopes for better times ahead.
All was not so good for mid-cap Cobham, 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. (Reporting by Kit Rees, additional reporting by Danilo Masoni; Editing by Dale Hudson and David Evans)