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Sainsbury’s loss; Lloyds rises; Microsoft, Google surge

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6pm: Blurred lines for markets

Danni Hewson, AJ Bell financial analyst, comments on the close of the London markets amid a week of big tech figures.

Google

“Results season has continued apace today, and markets seem to be reeling from the onslaught. No sooner do investors begin to digest one set of figures and another pops up to blur the overall picture.

“US markets have been pretty flat; Google owner Alphabet has continued to delight after stellar results whilst Microsoft’s (reports below) pretty successful numbers have paled by comparison and Spotify’s cautious outlook saw shares sink.”

“Analysts are predicting similar mood music from Facebook later tonight. Ad revenue figures will be scrutinised, details of how the e-commerce vehicle “Shops” has held up as lockdowns relax will be weighed up and the outlook probed for insight into potential regulatory issues.

“How well Apple has bitten into the competitive world of streaming will draw attention tonight as will sales of its 5G iPhone. Expectation for growth is high particularly with stores reopening.

“All of that will be tempered by an update from the Federal Reserve, any hint of future policy changes will set the tone for the FTSE on Thursday. London markets have made small gains today but a mixed bag of results and a watchful eye on Wall Street have kept momentum in check.

“The UK’s corporate calendar also speeds towards the weekend with more big-name updates due in the morning including NatWest, Unilever and Shell.”


4.30pm: London rises

The FTSE 100 closed 23.58 points higher at 6,968.55.


4.15pm: Foster quits

Arlene Foster has announced her resignation as leader of the Democratic Unionist Party and First Minister of Northern Ireland.

Full story here


3pm: Bitter news from sweets firm

Swiss firm Nestlé is to axe nearly 600 staff and shut its Newcastle factory where it makes Fruit Pastilles – and shift production of its sweets to plant in the EU. 

The company, which bought York-based Rowntree in the 1980s, is proposing the closure of its site in Fawdon on Tyneside towards the end of 2023, with the loss of around 475 jobs. A further 98 jobs will go in York.

The company said it was proposing changes to adapt its confectionery manufacturing for the future, with a £29.4 million investment at its factories in York and Halifax.


11.15am: Aegon takes on geeks

Aegon UK has acquired Pension Geeks, a company which helps consumers better understand the investment world.

Full story here


10.30am: New role for Wilson

Former Scottish Enterprise chief executive Lena Wilson has been appointed chairman of AGS Airports.

Full story here


9am: London rises ahead of Fed meeting

The FTSE 100 edged up 25.3 points to 6,970.28 as investors awaited the outcome of the US Federal Reserve’s policy meeting.

The blue-chip index was boosted by a series of positive earnings updates from advertising firm WPP and Lloyds Banking Group, with the latter reporting upbeat profit for the first three months of the year (see below).


8.30am: Soben expands overseas

Soben, a quantity surveying and commercial management consultancy headquartered in East Kilbride, is opening an office in the US.

Full story here


7am: Stagecoach share sale

Brian Souter

Stagecoach Group founders Sir Brian Souter, a non-Executive director, and his sister, Dame Ann Gloag have begun scaling back their holdings in the company they founded 40 years ago.

They have sold 11,568,454 shares to institutional shareholders which will reduce the overall interest of Sir Brian, 66, and Dame Ann, 78, and their families from 27.1% to approximately 25%. They plan to reduce their stake to 5% each over ten years.

Full story here


7am: Sainsbury’s loss

Sainsbury's Local

Sainsbury’s has reported a £261m loss for the year following falling fuel sales and the cost of COVID-19 measures, but the company kept its annual dividend unchanged.

Britain’s second-biggest supermarket chain said grocery sales for the year to 6 March climbed by 7.8% but overall revenues were flat as fewer motorists used their cars during a year of lockdowns.

COVID-19 costs of £485m – covering staff absences as well as measures to make stores safe – plus a one-off restructuring charge took the group into the red for the year.

The FTSE 100 group is proposing a final dividend of 7.4p a share, taking the annual payout to 10.6p – in line with the year before.

Chief executive Simon Roberts said: “This year’s financial results have been heavily influenced by the pandemic.

“Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.

“Like our customers, we are all looking forward to things feeling more normal over the coming months and getting excited about a summer of celebration, but we are also cautious about the economic outlook.”


7am: Lloyds improves

Lloyds Bank reported better than expected first quarter profits reflecting an improved economic outlook, in the last set of results for outgoing chief executive António Horta-Osório.

The bank said pre-tax profits came in at £1.9bn compared with £74m a year ago and against analysts forecasts of £1.1bn. Results were helped by a net impairment credit of £323m in the quarter, as Lloyds released £459m previously set aside to deal with the coronavirus pandemic.

Looking ahead, Lloyds said it expected a net interest margin of 245 basis points for 2021.


7am: Persimmon sales higher

Persimmon said house sales so far in 2021 are running 11% higher than the year before the pandemic as the UK’s mini-housing boom continues.

Forward sales for the period from 1 January to now are worth £3bn, it added, or 23% above a year ago when the pandemic struck and compare to £2.7bn in 2019.

Prices are also rising, said the FTSE100 housebuilder, with the average for a private house built by the group now £252,000 against £244,500 a year ago.

Dean Finch, chief executive, said it had been a strong start to the year with build rates at pre-Covid levels and first-half volumes approaching those of 2019.


Tech giants report soaring profits

Google’s sales surged 32% from the same time last year to nearly $45 billion (£25bn) between January and March.

It is the third consecutive quarter of accelerating advertising growth for Google’s owner Alphabet following an 8% decline between April and June last year.

That marked the first time Google’s quarterly ad revenue had fallen from the previous year since the company went public in 2004.

The resurgence enabled Alphabet to easily surpass the analysts’ estimates.

Microsoft’s profits soared during the first three months of 2021, thanks to ongoing demand for its software and cloud computing services during the pandemic.

The company on Tuesday reported fiscal third-quarter profit of 14.8 billion dollars (£8.26 billion), up 38% from the same period last year.

“Over a year into the pandemic, digital adoption curves aren’t slowing down. They’re accelerating, and it’s just the beginning,” CEO Satya Nadella said in a statement.

The software maker posted revenue of $41.7bn (£23.28bn) in the January-March period, up 19% from last year.

Revenue from Microsoft’s productivity segment, which includes its Office suite of workplace products such as email, grew by 15% over the same time last year, to $13.6bn (£7.59bn). Its cloud computing business segment grew 23% to $15.1billion (£8.43bn).

Microsoft’s personal computing business segment grew by 19% to $13bn (£7.26bn), buoyed by last year’s release of a new Xbox gaming console and an unusually strong season for PC sales across the industry.

Microsoft receives licensing revenue for computers made by other manufacturers running its Windows operating system.


Overnight markets

The FTSE 100 was expected to start Wednesday’s session on the front foot as traders await the latest interest rates decision from the US Federal Reserve.

Spread-betters IG expected the blue-chip index to open around 25 points higher after ending Tuesday’s session down 18 points at 6,944 due to a rising pound.

At the close, the Dow Jones Industrial Average was up 0.01%, while the S&P 500 was 0.02% weaker and the Nasdaq Composite saw out the session 0.34% lower.



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