Blue chips rally as Google fuels tech bounce back
London markets were buoyed yesterday after earnings from Google parent Alphabet smashed expectations on Wall Street.
As worries about technology stocks eased, the FTSE 100 index and the FTSE 250 were on the up. The rally came after Alphabet posted profits of £15.2bn for the three months to the end of december, up from £11.2bn a year ago and ahead of expectations.
Revenues rose 32pc to £55.5bn. despite jitters about the growth potential of tech giants, Alphabet said advertising revenues grew as the pandemic fuelled demand for digital ads on its websites.
Ad revenues jumped to £45.1bn in the quarter from £34bn a year ago. Boss Sundar Pichai said it enjoyed record quarterly sales for its Pixel mobile phones, though they are still far behind the dominance of rival Apple’s iPhones.
The firm also announced a stock split in a bid to make its shares cheaper. Alphabet shares were 8pc higher on Wall Street last night. AJ Bell investment director Russ Mould said: ‘The technology sector started 2022 with some of the biggest question marks over it since the dotcom crash more than two decades ago.
‘However, the largest and highest quality US tech names continue to deliver the answers the market wants.’
The gains came ahead of results from Facebook owner Meta last night and Amazon tonight.
However, there was no respite for Paypal, which sank 25pc in
new York as it joined the ranks of pandemic boom-to-bust stocks following disappointing results.
Some of London’s own tech firms received a boost, with online grocery group Ocado topping the blue-chip risers. It gained 5.7pc, or 81.5p, to 1512.5p after analysts at Credit Suisse double-upgraded the stock to ‘outperform’ from ‘underperform’ and hiked their target price to 1750p from 1500p.
The investment bank said that the current share price level, which is 45pc lower than it was 12 months ago, represented ‘a buying opportunity’.
The FTSE 100 was up 0.63pc, or 47.22 points, at 7583 while the FTSE 250 jumped 0.37pc, or 81.46 points, to 22249.40.
Pharma giant Glaxosmithkline inched up 0.4pc, or 5.8p, to 1650p after its HIV drugs unit Viiv Healthcare reached a £921m legal settlement with US rival Gilead in a long-running patent row.
Under the agreement, Gilead will also pay a 3pc royalty on sales of an HIV drug to Viiv until 2027.
Blue-chip property group British Land climbed 0.4pc, or 2p, to 547.4p after snapping up a 12.5acre warehouse site in north London for £157m.
The plot contains three warehouses comprising 245,000 square feet which are already occupied by Amazon, online retailer Euro Car Parts and the north London Waste Authority, generating around £3.6m per year.
A senior adviser at Virgin Money, Mark Thundercliffe, pocketed around £156,186 after offloading 82,203 shares for around 190p each on Tuesday, about equal to the company’s closing price that day.
Virgin Money shares rose 3pc, or 5.7p, to 195.9p after it also received a target price hike from Barclays.
Water company Severn Trent remained on track to invest over £500m to help clean up the country’s rivers and reiterated its fullyear guidance.
The investment plans come after it was fined £1.5m by the Environment Agency in december for illegally discharging sewage into British waterways. The shares dipped 1pc, or 30p, to 2933p.
Meanwhile, mid-cap oiler Harbour Energy tanked 5.5pc, or 20.2p, to 345.2p as the boss of its European business, Phil Kirk, headed for the exit.