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Scottish Mortgage hit by Tesla slide; oil gushes; Royal London

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4.30pm: London close

Tesla store in Edinburgh

The weakness in the US tech sector was a drag on Edinburgh-based Scottish Mortgage Investment Trust, which shed 6.53% to 1017p because of its weighting towards that sector. Its top holdings include Tesla, Amazon and Alibaba.

A sharp decline in Tesla’s share price on Wall Street wiped more than $250bn (£193bn) off the value of the electric car company.

SMIT was the second-largest faller in the FTSE 100. Its shares, which more than doubled last year powered by Tesla gains, are down 26% from a high in February.

Baillie Gifford US Growth Trust was the biggest faller in the FTSE 250 index, down 13.78% to 269p. The trust’s managers began reducing their holdings in Tesla shares at the beginning of the year.

Oil companies rose after Brent Crude oil prices hit a 14-month high, rising 3% to $68.84 in late morning trade following a stronger-than-expected US jobs report and a decision by OPEC and its allies not to increase supply in April.

The FTSE 100 closed down 20 points, 0.3%, at 6,631 as inflation worries weighed on sentiment.

8.45am: London slides

As expected, the FTSE 100 fell in early trade in line with overseas markets (see below). The index of blue chip stocks was trading at 6,591.04, down 59.84 (0.90%).

London Stock Exchange said listed firms raised the most money in more than a decade over the past year as they battled the impact of coronavirus.

7am: Parsley Box to float

Kevin Dorren

Scotland-based ready meal provider Parsley Box, led by Kevin Dorren, pictured, and chaired by Chris van der Kuyl, has announced its intention to float on London’s Alternative Investment Market.

The company, which targets its meals at the “baby boomer” generation, said it would give its customers the chance to invest in the firm as part of the IPO.

Full story here

Royal London profits fall

Royal London, which owns Scottish Life and Scottish Provident, said operating profit before tax decreased to £41m (2019: £165m), reflecting reduced new business sales and continued investment to enhance customer service and generate long-term growth.

Profit before tax came in at £131m (2019: £414m), reflecting reduced operating profit as well as lower relative returns on UK investments in 2020 and further reductions in yields to historic lows.

The statement revealed that Royal London sold the Ascentric platform to M&G in September for £86m. This week it acquired robo-advice business Wealth Wizards from LV.

Barry O'Dwyer

Barry O’Dwyer, group chief executive, (pictured) said: “Our asset management business successfully navigated volatile financial markets in 2020. Assets under management increased to £148bn and we saw strong inflows into our sustainable funds.

Pensions new business sales reduced, primarily due to individuals delaying the decision to consolidate their investments and fewer people moving employer during these uncertain times.

“Intermediated Protection performed strongly as a result of enhancements to our product proposition and maintaining excellent customer service. We have paid £13.1m in Protection claims to families of more than 2,100 customers who sadly died from Covid-19.

“As a mutual we are able to take a long-term approach despite short-term uncertainties. Our robust capital position has allowed us to continue our investment in systems and service to benefit our customers.

“Eligible customers will also benefit from a ProfitShare of £146m, a unique feature of mutuality which enhances the value of their savings.”

Aggreko recommends offer

The boards of directors of Aggreko and Albion Acquisitions, a vehicle for I Squared Capital and TDR Capital, have recommended an all cash takeover valuing the Glasgow power generator at £2.3bn.

Full story here

Unite students discount

Unite student accommodation

Unite Students, the owner, manager and developer of student accommodation, has announced an additional three-week extension to its 50% rent discount for students, originally announced on 11 January.

Full story here

Markets

Japanese shares fell for a second straight session, following a dip on Wall Street after Federal Reserve chairman Jerome Powell made comments that disappointed investors worried about rising longer-term US bond yields and inflation which would push up interest rates.

Mr Powell did not indicate that the central bank was planning immediate action to halt the rise in yields on Treasury bonds.

The Fed would continue its asset purchases of $120 billion a month until “substantial further progress” had been made and that it would be “some time” before conditions emerged where it would even contemplate a rise in its base interest rate, he said.

But Wall Street considered that this was not enough.

The S&P 500 fell 1.3%, to record its third consecutive session of declines. The Nasdaq dropped by 2.1% and is now close to a 10% decline from its record high earlier this year – close to a correction. The Dow Jones Industrial Average shed 1.1%, after dropping by 722 points during the day.

Asian markets followed suit with the Nikkei share average losing 2.14% at 0200 GMT, while the broader Topix was down 1.13% to 1,863.45.



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