UK stocks lost morning gains at lunchtime after EU regulators accused Apple of distorting competition in the music streaming market, siding with Spotify in a case that could lead to a hefty fine and changes in the iPhone maker's lucrative business practices.
These were only preliminary findings and they start a process that will allow Apple and Spotify to respond. Apple stock lost around 1.5% pre-market at $133.48, while Spotify rallied nearly 2.5% to $262.15.
Overnight, Amazon rounded off an otherwise rip-roaring earnings season for the major internet platform companies, reporting a fourth consecutive quarter of record earnings, helped by Prime subscriptions, advertising income and the strength of its web services business, sending its shares up 4% in after-market trading.
Wall Street opens at 2.30pm UK time.
At 12.45pm, the benchmark FTSE 100 had dipped 0.2% into the red at 6,949.15, with the FTSE 250 similarly off, down 0.25% at 22,335.90.
On the currency markets, sterling drifted lower against the dollar to $1.3940, while gold and oil also ticked lower to $1,771 per ounce and $68.17 per barrel respectively.
UPBEAT ON CANCER AND COVID
Pharmaceutical giant AstraZeneca (AZN) was the best performer on the FTSE 100, rallying 3.5% to £76.62 after the firm reported ‘robust’ revenue growth of 15% in the first quarter driven by oncology drugs as well as its Covid vaccine.
The firm flagged its strong drug pipeline, with significant advances for its Lynparza breast cancer treatment in recent trials, and confirmed its expectation of ‘a performance acceleration’ across the group in the second half.
Investors got very excited about the debut of UK cyber security firm Darktrace (DARK), the stock jumping 40%-odd to 353p after the company lowered its starting valuation.
The shares were priced at 250p for a £1.7 billion London listing, but the stock rallied in early trading to hit 355p, well above the 220p to 280p range set by its brokers when its roadshow began on 26 April 2021.
Shares in FTSE rival Hikma Pharma (HIK) added 2.4% to £24.29 after the company posted a first quarter trading update saying 2021 was ‘off to a good start’ with performance in line with its expectations.
The company confirmed its forecast for injectables sales to grow by mid single digits this year and for operating margins in the 37% to 38% range, but raised its forecast for generics revenues to the top end of its previous guidance (ie $810 million) with an operating margin in the region of 20%.
Barclays (BARC), the last of the big four UK lenders to report, posted first quarter pre-tax profits of £2.4 billion, more than double last year’s £923 million and comfortably ahead of the consensus forecast of £1.76 billion.
But prudent action on balance sheet protection appeared to unsettle investors, the stock crashing more than 6% to head the FTSE 100 loser board.
Unlike most of its peers, the bank didn’t write back any of its £9 billion of provisions for bad loans, instead taking a notional charge of £55 million.
Barclays’ shares fell nearly 12p to 176.78p.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20.8% to £8.8 million, while the company raised its interim dividend to 1.69p, a hike of 45.7%.
Music rights group Hipgnosis (SONG) issued another 9 million new shares at 119.5p against a closing price of 122.6p ‘to fund an investment’. While small in the grand scheme of things, the placing takes the total amount of equity capital raised since IPO to close to £750 million.
The shares stayed flat at 122.6p.