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Musk sparks panic over Twitter doubts | FTSE 100 leaps
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5pm: Musk triggers panic
Elon Musk man triggered panic in the markets after announcing, in a tweet, that his purchase of the social media platform is “temporarily on hold”.
The impact was instant, initially wiping 16% off the price of shares that three weeks ago he valued at $54.20 (£44.50) in a $44bn (£36.1bn) takeover.
The cause of the Tesla tycoon’s delay focuses on data around spam or false Twitter accounts. If there are fewer than he previously thought there may be less scope to quickly transform the user experience. If there are more, that’s fewer real account holders from whom to raise revenue.
In a second Tweet, posted after two hours of speculation, he wrote: “Still committed to acquisition”.
In London, the FTSE 100 staged a strong rebound, up 184.81 points (2.55%) at 7,418.15.
Scottish Mortgage Trust, which lost its crown this week as the biggest investment trust, roared back with a 55p (7.33%) surge to 806.30p.
In New York, around London’s close, the Dow Jones Industrial Average was up 1.4%, while the broader S&P 500 index gained 2.3%, and the Nasdaq Composite jumped 3.5% as tech stocks soared.
Michael Hewson, chief market analyst at CMC Markets UK commented: “For those of a superstitious nature, and after the week we’ve seen in equity markets, perhaps a hint of apprehension wasn’t surprising as we came to the final day of trading for this week on Friday 13th.
“As it turns out the price action today has been fairly orderly, as well as positive to boot with broad gains across the board, as we look to cap a week of gains for European markets, closing at the highs of the week, while the FTSE 100 has lagged.”
8.30am: Menzies expands in LA
Menzies Aviation has expanded its presence at its largest hub in the Americas with three new contracts.
It has secured the mandates at Los Angeles International Airport (LAX) and Mas, a Mexican cargo specialist, and has also widened its agreement with Latam Group, the Chilean airline.
8.15am: London opens higher
The FTSE 100 rose 66 points to 7,299.38 in early trade following the rally in Asia (see below).
Online grocery business Ocado, up 5%, led the London rebound, with financial stocks also rallying.
7am: Sage shows momentum
Accounting software firm Sage said organic recurring revenue increased by 8% to £866m, underpinned by Sage Business Cloud growth of 21% to £572m. Organic total revenue grew by 5% to £924m.
Organic operating profit increased by 4% to £184m while statutory operating profit remained stable at £204m (H1 21: £203m).
The company declared a 4% rise in the interim dividend to 6.3p.
CEO Steve Hare said: “We achieved a strong first half performance , in line with expectations, demonstrating sustainable growth and building further momentum.
“Our strategic investment in sales, marketing and innovation has continued to accelerate revenues across Sage Business Cloud, underpinned by increasing levels of new customer acquisition. Cloud native solutions, which now account for around a quarter of Group ARR, have performed particularly well.”
IG futures were tipping the FTSE 100 index to open up by about 77 points, or 1.1% on the back of a relief rally in Asia.
Despite downward pressure on equities in Europe and the US, Asian stocks were on an upward trajectory with the Nikkei 225 index 2.6% higher, the Shanghai Composite up 0.5% the Hang Seng index rising 1.9%. The S&P/ASX 200 in Sydney was also up 1.9%.
Wall Street stocks were mostly weaker at the close on Thursday, although they were off their earlier lows, as inflation data continued to weigh on sentiment.
At the close, the Dow Jones Industrial Average was down 0.33% as the S&P 500 lost 0.13% and the Nasdaq Composite managed to stem this week’s tech sell-off with a 0.06% gain.
The small rebound on the tech-rich Nasdaq came after Federal Reserve chair Jerome Powell – whose appointment was confirmed by the Senate for a second term – expressed confidence that the US economy is strong enough to withstand tighter monetary policies.
According to Bloomberg, Powell reaffirmed that the Fed was likely to raise rates by a half point but isn’t “actively considering” a 75-basis point move.
Brent crude was quoted at $109.15 a barrel this morning from $108.55 late Thursday.