FTSE 100 Live: Sell-off intensifies, BHP leaves top flight, Abrdn sells Phoenix stock, Apple beats forecasts

·13 min read
 (ESI)
(ESI)

Apple has given the tech sector a much-needed boost after last night reporting record quarterly sales of $123.9 billion (£92.6 billion).

The iPhone maker's shares rose 5% in after-hours trading as it also delivered a 20% rise in net profit for the period. Its performance means Wall Street’s Nasdaq 100 is expected to open higher after one of the most volatile weeks in its history.

London's premier index has so far weathered the tech storm, although it fell back today after nearing a fresh two-year high last night. Today's session is the last in the FTSE 100 index for mining giant BHP, which is switching its primary listing to Australia.

FTSE 100 Live Friday

  • FTSE 100 lower at end of turbulent week

  • BHP exits FTSE 100

  • Apple sales record boosts tech sector

  • Aviva boss urges office return

Wall Street opens lower

15:14 , Oscar Williams-Grut

Stock markets have fallen in New York at the start of the trading day there, though not by much. The biggest fall is on the Dow, which is down 0.6% at time of writing.

Selling pressure has eased on this side of the Atlantic, with the FTSE 100 1.4% lower with an hour and a bit left of the trading day.

Stocks sell-off intensifies

13:27 , Oscar Williams-Grut

The FTSE 100 is going lower and lower as the session wares on.

London’s bluechip index is now down about 120 points, or 1.6%, in lunchtime trade. Ocado is at the bottom of the index, dragged lower by a German court ruling that went against it. Shares in the online grocer are down over 6%.

Scottish Mortgage Investment Trust, which backs tech companies like Moderna and Tesla, is down 4.8%. That’s as stocks look set to fall again on Wall Street when the trading day begins over there in about an hour.

Not everyone is falling: the artist formerly known as Aberdeen is at the top of the table with a gain of 1.6% after promising to return around £260 million to investors. That’s being funded through the sale of shares in Phoenix, the pensions and retirement giant. Abrdn offloaded a 4% stake in Phoenix overnight at a discount. That has sent Phoenix tumbling 3.6%. The FTSE 100 savings group says a partnership with Abrdn is unaffected by the sale.

Vaccine maker’s £130m US push

13:21 , Simon Freeman

The biotech leading manufacture of AstraZeneca’s Covid-19 vaccine today made its first big move into the US market with a $175 million (£130 million) deal for a majority stake in Boston’s Homology Medicines.

Oxford Biomedica will acquire an 80% holding in a new combined venture with the US viral vector pioneer.

The business will focus on developing cell and gene therapies using adeno-associated virus (AAV) vectors, a rapidly growing platform for gene delivery in the treatment of diseases including rare hereditary forms of blindness and bleeding disorder haemophilia B.

Biomedica is issuing 4.8million new shares to fund £80 million of the acquisition which will be open to retail investors through the PrimaryBid platform.

It is taking out a £64 million bridging loan through Oaktree Capital Management.

John Dawson, who is stepping down after 12 years as CEO, said his valedictory deal will bring “proven, scalable AAV capabilities and expand our presence into the US”.

Chairman Roch Doliveux, who will step up as interim CEO, said the "potentially transformative deal" makes it "easier to support John’s decision to step down".

Dawson, whose retirement was announced earlier this month, will remain as a board member and advisor.

Shares fell 63p to 837p.

Rivals trade blows in ‘robot wars'

12:59 , Simon Freeman

Shares in Ocado were trading down 7% today after Norway’s AutoStore claimed a victory in one of the rival warehouse robot-makers’ several ongoing legal battles.

AutoStore issued a statement to the markets saying that a judge in Munich had halted proceedings brought by Ocado to prevent the sale of one of its robots in Germany.

The statement caused Softbank-backed AutoStore’s shares to lift by as much as 18% in Oslo.

Ocado, however, countered the claim and described the Munich court action as merely "procedural".

FULL STORY HERE

12:45 , Oscar Williams-Grut

The company at the centre of a messy dispute with the restauranteur behind The Wolsley is overseeing the expansion of another investment elsewhere in London.

Benihana is launching a new £2 million, 206-seat restaurant in Covent Garden. It is the Japanese grill chain’s first new opening in Britain since 2019 and will be its largest UK outlet.

London-based Benihana Holdings is majority-owned by Thai hotel operator Minor International, which is currently facing off against Corbin & King, the London group behind destinations including The Wolseley and Brasserie Zedel.

Corbin & King’s founders, Jeremy King and Chris Corbin, sold a 74% stake to Minor four years ago, but the two parties have since fallen out and are currently locked in a dispute over control of the company.

Minor forced Corbin & King into administration this week, saying it had “no other viable option than to appoint administrators”. King said in a YouTube video posted on Thursday that the business was “under siege” from its investor but “in rude financial health”. He has vowed to buy the business out of administration and pay off any debts.

Read the full story.

Heathrow warns of £300 million profit hit

12:25 , Oscar Williams-Grut

Heathrow is set to take a £300 million hit after the Civil Aviation Authority blocked it from hiking passenger charges by as much as it would like.

Britain’s busiest airport said revenue and earnings for the year would now be £307 million below previous estimates after the CAA limited charges to £30.19. That was £7 below where Heathrow had hoped.

The airport warned it could now breach debt covenants if passenger numbers in 2022 are 15% below forecasts.

Heathrow said it was “extremely disappointed” by the CAA’s charge cap decision, calling it “rushed”.

"We have identified material and basic errors in the CAA’s analysis, which, if corrected, would lead to a higher charge in the final decision and protect financeability,” the airport said.

Mike Lynch loses HP case

12:04 , Oscar Williams-Grut

Mike Lynch, the Autonomy founder, has lost his acrimoniousHigh Court battle with Hewlett Packard over false accounting.

“The claimants have substantially succeeded in its claims in these proceedings,” Judge Robert Hildyard said reading a summary of his judgment on Friday.

HP was seeking $5 billion in damages from Lynch but the judge said the amount is likely to be less but will be decided at a later time.

All attention will now turn to the UK government, which will soon decide whether to extradite Lynch to the US where he faces criminal charges that he orchestrated a massive fraud at Autonomy.

Read the full story.

Zapp raises $200 million

11:37 , Oscar Williams-Grut

Over in the private markets: an on-demand grocery startup founded less than two years ago has raised $200 million (£150 million) to accelerate its growth in the cut-throat market.

Zapp, which launched in late 2020, has attracted investment from top tech funds, Singapore’s sovereign wealth fund, and Formula One champion Lewis Hamilton.

The start-up is part of a growing number of “quick commerce” companies vying to win a share of Londoner’s wallets in the post-pandemic era. Zapp promises to deliver grocery and convenience store items to your door in as little as 10-minutes. It has a network of “dark stores” across the capital that allow it to deliver at such speed.

Read the full story.

Downbeat session as BHP exits FTSE 100

10:42 , Graeme Evans

BHP's last session in the FTSE 100 index prompted a surge of activity today as tracker funds ended their exposure to one of London's biggest stocks and best dividend payers.

The mining giant's decision to switch its primary listing to Sydney as part of the unification of its corporate structure represents a big blow for the City.

BHP was created in 2001 from the merger of BHP Limited and London-listed Billiton, but the vast majority of its profits are now generated through its Australian arm.

Bloomberg reported that trading volumes were today running at almost six times the 20-day average as FTSE 100 trackers offload holdings. BHP, which will continue to trade in London through a standard listing, was today 30p lower at 2413p.

Its departure creates space for a new FTSE 100 entrant, with mobile phone towers business Airtel Africa due to take BHP's place on Monday.

BHP's exit added to the downbeat mood as the FTSE 100 index fell almost 1% at the end of another eventful week. The top flight slid 70.83 points to 7483.47, but is still up in 2022 as London's defensive characteristics protect investors from tech sector turbulence.

Long-term savings and retirement business Phoenix was one of the day's biggest blue-chip fallers after Abrdn offloaded a 4% stake through a £264 million placing at 660p a share.

Phoenix fell 4% or 27.8p to 658.4p but Abrdn, which has reduced its holding to 10%, lifted 2.7p to 240.9p

.The FTSE 250 index fell 193.91 points to 21,659.08, with Cineworld down 6% or 2.2p to 37.22p after Canadian rival Cineplex launched a new claim in the pair's ongoing court battle.

Outsourcer Capita also fell 0.6p to 31.78p after it offloaded IT services company Trustmarque to One Equity Partners for £115 million.

Plans for a buyback worth £18.5 milion gave a modest boost to struggling shares in respirators business Avon Protection. The military supplier lifted 5p to 1053p as it also reported resilient first quarter trading.

Comment: City Libor traders are not criminals, they never were

10:30 , Simon English

You don’t have to like City traders (hardly anyone does) to think that today’s Libor verdict overturning criminal convictions is just.

Until Libor, the rate at which banks borrow from each other, became central to the financial crisis it was a niche instrument even in the Square Mile.

It wasn’t really regulated, and no one much cared.

With the system teetering, it suddenly became important that Libor was low to suggest that banks trusted each other, whatever the reality..

read more here

Aviva boss: time to get back to the office

09:25 , Simon English

THE chief executive of one of the biggest institutions in the City today said it is time for workers to get back to offices.

Amanda Blanc, the boss of the £16 billion Aviva insurance giant which has 20,000 staff based in London, said the “hokey cokey” of staff coming in to offices as Covid cases fell, then being sent back home must end.

“My view is that we would like people to be in the office three days a week, though there will be flexibility around that,” she said.

“I am really keen that we do have some physical presence in the office even though the way we work will be different.”

She told Radio 4: “It has been like the hokey cokey, and I think that is difficult for our colleagues.”

read more here

BHP volumes surge on last day in FTSE 100

09:09 , Graeme Evans

BHP shares are broadly unchanged on the mining giant's last day in the FTSE 100 index.

The heavyweight stock loses its blue-chip status from tonight because it is moving its primary listing to Sydney as part of the unification of its corporate structure.

BHP is the third largest stock on the FTSE 100 index and one of its best dividend payers, making the exit a big blow for the City and the index trackers now forced to sell their shares.

Bloomberg noted that today’s BHP trading volumes were almost almost six times the 20-day average.

BHP was formed in June 2001 from the merger of Australia's BHP Limited and London-listed Billiton. The vast majority of its profits are now generated by its Australian arm, prompting the drive for a simpler corporate structure.

The miner's shares will continue to trade in London through a standard listing. but from Monday will be replaced in the FTSE 100 by mobile phone infrastructure business Airtel Africa.

FTSE 100 eases, Phoenix lower after Abrdn sale

08:43 , Graeme Evans

The defensive characteristics of the FTSE 100 index have protected London investors in recent sessions, with the top flight closing near to a two-year high last night.

The FTSE 100 gave up some of its recent gains today, falling 49 points to 7505.31.

Long-term savings and retirement business Phoenix was the biggest faller, declining 4% after Abrdn reduced its stake through a £264 million placing of shares. Grocery technology business Ocado dipped 3% and Primark owner Associated British Foods eased 2%.

The Phoenix shares sale helped investment company Abrdn to rise 1% and there were further gains for BT Group, which lifted 1.4p to 194.95p.

The FTSE 250 index was down 0.8% or 176.15 points at 21,678, led by IG Group as its shares declined 6%.

China demand boosts Apple sales

08:07 , Graeme Evans

Tech giant Apple has revealed sales rose 11.2% to a quarterly record of $123.9 billion (£92.6 billion) at the end of last year, with strong demand in China one factor driving the better-than-expected performance.

Revenues in the Americas also rose by double-digits and there was growth across all product ranges apart from iPads. Sales of iphones accounted for 58% of the total after a 9% rise to $71.6 billion (£53.5 billion).

Apple boss Tim Cook said: “This quarter’s record results were made possible by our most innovative lineup of products and services ever.

“We are gratified to see the response from customers around the world at a time when staying connected has never been more important.”

The California-based company reported an 18.2% increase in operating expenses, including $6.3 billion (£4.7 billion) spent on R&D. It also faced chip shortages and other supply chain issues, but still managed to grow net profit by 20% to £34.63 billion (£25.9 billion).

Hargreaves Lansdown equity analyst Sophie Lund-Yates said: “Apple’s operating model relies on an incredibly short production cycle, as competition in the hardware space is so competitive. It’s obvious that this titan of industry hasn’t come up against insurmountable supply chain issues like some.”

Apple shares rose 5% in after-hours trading in New York.

Apple calms Wall Street nerves

07:38 , Graeme Evans

Wall Street volatility continues to be no problem for the London market after the FTSE 100 index yesterday neared a two-year high.

The top flight, which benefits from its reliance on old economy stocks in banking, oil and tobacco, is set to rise another 10 points to 7564.

Its improvement so far in 2022 contrasts sharply with the performance in the US, where the Nasdaq is now 17.6% below its November high after falling a further 1.4% yesterday.

Wall Street trading has fluctuated wildly throughout this week as investors prepare for the possibility of more frequent hikes in interest rates from March onwards.

Today's session looks set to be calmer in New York after Apple overcame ongoing chip shortages to post record quarterly sales. The iPhone maker's shares rose 5% in after-hours trading, meaning Nasdaq futures are pointing to a positive start.

Oil prices remain near a seven-year high and set for their sixth weekly gain after Brent crude futures peaked at $91 a barrel yesterday.

Supply issues and geopolitical tensions have kept prices inflated, with Opec+ members not expected to change their production plans for March when they meet next week.

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