Market report

London lower on rate hike | Omega rises on milestone


5pm: Facebook plunge stuns markets

Facebook‘s plunging value dragged down major stock indexes and reversed recent market gains.

Shares in its owner Meta fell 24% in morning trade after the social media giant issued a downbeat forecast and reported its first ever decline in daily active users. 

CEO and founder Mark Zuckerberg saw $29 billion wiped from the value of his stake as the company’s market capitalisation plummeted by $200 billion.

Full story here

London closes lower

The FTSE 100 finished the day on a down note, easing 54 points, or 0.7%, to 7,529, after the Bank of England announced a second consecutive interest rate hike to curb inflation, which put upward pressure on the pound. Markets expect this to be the first of a series of hikes this year.

Among the climbers was of catering group Compass, which climbed 4% after saying its first-quarter revenue had reached 97% of its pre-pandemic levels.

Shell closed up 1.4% after the energy major hailed a “momentous year” as earnings bounced back from the Covid-19 hit that it took in 2020 (see below). BP gained 0.7% in a positive read-across.

BT closed 4.8% lower weaker year-to-date earnings overshadowed its talks on a new sports TV service with Discovery.

Shares in AIM-quoted Omega Diagnostics closed 1.38p (14.47%) higher at 10.88p after receiving a new certification for its Covid test kit (see below).

9.30am: FTSE 100 higher despite BT hit

BT shed 3.5% after lowering full-year revenue guidance while investors warmed to Shell whose shares rose 1% after the company announced soaring profits and a repurchase of shares.

Richard Hunter at interactive investor said it was a return to form for the multinational company.

The best performing blue-chip was the contract caterer Compass, up 7% after the company reported a continued improvement in trading across all parts of its business.

The FTSE 100 managed to stay ahead in early trade, up 7 points at 7,590.03.

On AIM, shares in Omega Diagnostics rose 15.79% or 1.5p to 11p after it reported a new milestone in its testing kits (see below). The company’s shares have slid sharply in recent months and it confirmed talks over a new cash call on shareholders.

7am: Shell profits surge


Energy giant Shell posted a forecast-beating uplift in full-year profit on rebounding commodity prices and an increase in business activity.

Earnings came in at $19.29 billion compared to $4.85 billion in the previous year. Analysts polled by Refinitiv had expected full-year 2021 net profit to come in at $17.8 billion.

For the final quarter of 2021, it reported adjusted earnings of $6.4 billion.

Shares in the company are 20% higher year-to-date, although the price is below pre-pandemic levels.

Full story here

7am: BT sports JV

BT Sport

BT Group has entered exclusive discussions with Discovery on a deal to create a new sport and entertainment offering for customers in the UK.

The new business would be a 50/50 joint venture, bringing together BT Sport with Eurosport UK.

BT has also reached agreement in principle with Sky for a new longer-term reciprocal channel supply deal to beyond 2030.

In a trading update for the nine months to 31 December, it said faced revenue challenges due to delayed Covid-19 recovery and supply chain issues.

Full story here

7am: Omega milestone

Medical diagnostics firm Omega said its COVID-19 self-testing kit had achieved a key milestone in providing accurate results and remains in discussions with commercial partners about how best to service the European market and other territories.

This will be a commercial offering via B2B partners and distributors, and not through a direct-to-consumer strategy.

Jag Grewal, CEO of Omega, said:  “We are delighted to have reached this milestone, achieving CE Mark for our VISITECT COVID-19 antigen test for the home-use market.

“It is frustrating that our test is still awaiting approval under CTDA regulations for sale of the professional-use test in the UK. We will now look to begin the process of filing for approval to sell our home-use product in the UK. In the meantime, we look forward to working with prospective partners to determine the best route to market.”

Global markets – Facebook shares crash

Shares in Facebook parent Meta plunged by 20% as it reported the first reduction in the number of daily users in its history alongside a lower than expected revenue forecast this quarter.

The social network reported a drop of nearly 500,000 in daily logins during the last three months of 2021 – the first decline in its 18-year history.

CEO Mark Zuckerberg believes the slump was caused by the TikTok boom.

“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” he said during an earnings call.

Zuckerberg reiterated that Meta – which also owns Instagram and WhatsApp – is pushing hard to develop its short-form video Reels in an effort to compete with TikTok.

Google owner Alphabet smashed forecasts, with a jump of 36% in profits to $20bn as sales leapt 32%.

UK and European markets will focus on today’s interest rate decisions by the Bank of England and European Central Bank while households will learn about the energy price cap.

The Bank of England is expected to raise interest rates for the second consecutive month, with analysts expecting it to jump from 0.25% to 0.5%, as well as a change in the bond buying programme.

Wall Street seemed unfazed by lower than expected employment figures.The Dow Jones Industrial Average rose 0.6%, the S&P 500 added 0.9% and the Nasdaq Composite advanced 0.5%.

In Tokyo, the Nikkei 225 closed 1.1% lower, while the S&P/ASX 200 in Sydney fell 0.1%. The Hong Kong and Shanghai exchanges remained closed for the Lunar New Year holiday

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