London’s FTSE 100 opened higher on Wednesday as investors continued to shrug off fears about rising inflation, although sentiment will be tested on Thursday when the Bank of England provides an update on interest rates.
The blue chip benchmark was also lifted after Wall Street markets finished in positive territory last night, the continued rebound in US shares helping to lift investor confidence across Asia and Europe.
Alphabet’s shares advanced as the Google-owner followed Apple and Microsoft in underpinning a more bullish view on big tech by delivering better than expected fourth quarter revenue and announcing a stock split.
While Alphabet’s shares jumped 9.2% across the pond, PayPal’s shares slumped 17.9% in after-hours trading on Nasdaq after flagging a further slowdown in spending on its platform.
By 8.47 am, the FTSE 100 was up 0.5% at 7,573.53 points, while the FTSE 250 traded 0.7% higher at 22,325.7.
CORPORATE NEWS
Telecommunications titan Vodafone (VOD) improved 2.9% to 131.6p after the mobile phone giant assured it is on track to meet full year guidance following robust third quarter results.
The telco giant, in which activist Cevian Capital has built a stake, reported a 2.7% rise in third quarter group service revenue, up from 2.4% in the second quarter, with growth in both Europe and Africa.
CEO Nick Read insisted Vodafone remains ‘focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain and position Vodafone Business to maximise EU recovery funding opportunities’.
Investors welcomed his comment that Vodafone is ‘also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace’.
Online supermarket Ocado (OCDO) was also in demand, the shares ripening up 7.5% to £15.38 to top the FTSE 100 after Credit Suisse upgraded its recommendation from ‘underperform’ to ‘outperform’, citing ‘greater confidence’ around its new technology system which allows for deeper relationships with existing partners.
Mining giant Glencore (GLEN) gained 0.4% to trade at 397.4p as it confirmed annual production for 2021 was largely in line with expectations as copper, zinc, gold and silver production fell while cobalt and ferrochrome output rose.
Looking ahead, the FTSE 100 giant assured the market that 2022 production guidance is unchanged from the investor update in December 2021.
Rio Tinto (RIO) rose 1.4% to £54.27 after the mining titan said it was reviewing a new forecast by subsidiary Energy Resources of Australia on the cost of rehabilitating the Ranger uranium mine in Australia’s Northern Territory.
Pharmaceutical giant GlaxoSmithKline (GSK) gained 0.2% at £16.47 after its ViiV Healthcare joint venture with Pfizer agreed to receive a $1.25 billion settlement from Gilead over a HIV patent infringement claim.
Gilead has also agreed to a patent license agreement and to pay a 3% royalty on all future US sales of its Biktarvy HIV treatment.
Water utility Severn Trent (SVT) added 1.3% to trade at £29.41 having reiterated its guidance, saying there had been no changes to its business performance or outlook since its interim results announcement in November.
Severn Trent said a ‘strong’ operational performance was evident across all areas of its business.
AROUND THE MARKET
Gambling technology group Playtech (PTEC) perked up 0.7% to 581p on the news it doesn’t expect enough shareholders to support a proposed takeover by Aristocrat Leisure for the deal to proceed.
Playtech also said it is evaluating ‘attractive’ acquisition proposals from third parties in respect of its business-to-business and business-to-consumer assets.
Elsewhere, agricultural supplies play Wynnstay (WYN:AIM) firmed 1.4% to 590p as record results for the year to October 2021 showcased continued momentum in profit growth as the business benefited from growing farmer confidence and the strengthening of output prices.
CEO Gareth Davies said trading in the new financial year has begun well, ‘in line with our expectations. We have a clear growth plan with strategic investment programmes under way, and new opportunities. While there are challenges with rising costs, we are confident that Wynnstay is well-positioned to achieve its growth objectives for the year, and view prospects for continuing development very positively.’
Logistics group DX (DX.:AIM) announced that first half revenue grew 11% even as labour market and supply chain disruptions held back growth.
For the 26 weeks ending 1 January 2022, revenue was up 11% year-on-year and the company said trading momentum had continued into the third quarter. The shares remain suspended.
Cameroon-focused energy company Victoria Oil & Gas (VOG:AIM) gushed 6% higher to 4.4p after the company said it achieved higher sales rates in the third quarter of its financial year. ‘Following the end of the quarter, 2022 has started very well with strong demand shown in the market’, insisted the company.
