Shares in Scottish Mortgage jump 3pc as Amazon results impress
TECH-STOCK backer Scottish Mortgage Investment Trust rallied towards an all-time high on the FTSE 100 after top pick Amazon reported results that smashed Wall Street expectations.
Scottish Mortgage – which has also placed its faith in other tech stars Tesla and Alibaba – was buoyed by the e-tailing giant stunning market analysts by more than doubling its profit in the first quarter of the year.
Amazon is the biggest holding in Scottish Mortgage’s £6.2bn portfolio, making up a 9.3pc slice of its assets, and Amazon’s twoday share price rally lifted the UK company yesterday.
The investment trust was also boosted by Baidu, China’s biggest search engine and Scottish Mortgage’s sixth largest holding, which also comfortably beat expectations in its own first-quarter earnings.
Scottish Mortgage has placed big bets on tech stocks maintaining their progress, with its top four holdings hailing from the sector. Its own shares have been held back recently by the “techlash” on Wall Street in the wake of the Facebook data scandal but they jumped 3pc, or 13.6p, to 474.6p yesterday as the latest results suggested Silicon Valley’s stars will continue to grow at breakneck speed.
The bellwether tech results also put market sentiment back on track after being knocked earlier in the week by gloomy outlooks from other corporate heavyweights in the US, and the 10-year Treasury yield – a borrowing benchmark used around the globe – surging above the 3pc mark.
The pound’s slide on currency markets after GDP growth figures disappointed helped the FTSE 100 outperform its rivals in Europe, lifting the blue-chip index 80.78 points to 7502.21, a 12-week high.
Big dollar earners and bond proxies were in high demand with Unilever climbing 97.5p to £40.51 and drinks company Diageo advancing 55.5p to £25.58.
Paper and packaging giant Smurfit Kappa recovered from an early slip after US suitor International Paper insisted that it has a “Plan B” if its takeover attempt for the FTSE 100 firm fails. Boss Mark Sutton admitted that Smurfit is “a big one” but added that it wasn’t a “must-do deal”. Smurfit, which dismissed the $10.8bn (£7.8bn) bid last month as “opportunistic”, closed 44p higher at £30.98. IT infrastructure firm
Computacenter jumped 40p to £12.66 after the FTSE 250 company’s 21pc leap in revenue beat expectations, and management predicted that 2018 would be “a year of further progress” for profitability.
Asset manager Brewin
Dolphin dropped 3.4p to 360p after its finance chief Andrew Westenberger stepped down. The FTSE 250 company was also put under pressure by a price target cut from Barclays.
The Barclays analysts awarded emerging markets investment firm Ashmore an upgrade to “overweight”, telling clients to “follow the flow” as investors switch out of developed markets. Ashmore closed 2.6p higher at 410p.