UK stocks edged higher after a remarkable reversal overnight in the technology-focused Nasdaq 100 index in the US. From a loss of 4% at the London close the index clawed its way back to a gain of 0.5% at the bell.
Sentiment was also helped by US software firm IBM which posted better than expected revenues for the fourth quarter. However, investors are unlikely to commit to ‘buying the dip’ until the Federal Reserve meeting tomorrow is out of the way.
Sterling held steady at $1.3485 after falling back sharply from its highs against the dollar in the past week, while Brent crude oil was steady at $86.90 per barrel, retaining most of its recent gains.
At 9.15am the FTSE 100 index was up 27 points or 0.4% to 7,324 points led by mining and financial stocks, while utilities and staples, which provided a hiding place during the sell-off, eased back.
COMPANY NEWS
After their best day for many months yesterday, shares in consumer goods group Unilever (ULVR) traded sideways at £39.60 after chief executive Alan Jope presented a new corporate structure to make the firm simpler and ‘more category-focused’.
The firm said the new model would result in the loss of around 1,500 managerial jobs, making it quicker for it to respond to changes in channel and consumer demand.
Shares in Royal Mail (RMG) were among the best performers in the FTSE, gaining 3.6% to 452p after the firm reported a sharp increase in parcel volumes and revenues for the third quarter to December as well as a solid increase in turnover at its GLS logistics business.
The company said its Pathway to Growth restructuring programme had delivered £35 million of cost savings during the quarter and it was on track to deliver between £55 million and £80 million of benefits in the financial year to March.
Social housing energy services firm Sureserve (SUR:AIM) posted its first results under new chief executive Peter Smith, with a 25% increase in revenues and a 77% jump in pre-tax profits for the year to September.
During the year the firm won a record 167 contracts values at £147 million, and as it stands almost three quarters of this year’s revenue is already covered by the order book. Investors approved, sending the shares 4% higher to 90p.
Shares in diagnostics company Novacyt (NCYT:AIM) fared less well, compounding yesterday’s 12% fall by dropping another 16% to 200p after its first results under new chief executive David Allmond.
While the results were as expected, the firm’s view that covid-related sales could be 50% below last year’s level disappointed investors, as did the lack of certainty around product approval and availability.
Car parts supplier TI Fluid Systems (TIFS) said it expected revenues for the full year to December to come in just shy of €3 billion with an average margin on EBIT (earnings before interest and taxes) of 7% or slightly higher. Shares were unchanged at 241p.
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