LONDON MARKET OPEN: Amazon lifts sentiment; oil majors top FTSE 100

(Alliance News) - European equities opened higher on Friday, with sentiment lifted by strong quarterly results from the US tech sector, which had struggled in the wake of poorly received earnings from Facebook owner Meta Platforms.

Shares in New York tumbled on Thursday, with the tech sector worst-hit, Amazon included. The e-commerce firm's fourth-quarter earnings impressed, however, and the stock jumped after hours.

The FTSE 100 index was up 67.93 points, or 0.9%, at 7,594.77. The mid-cap FTSE 250 index was up 95.78 points, or 0.4%, at 22,063.56. The AIM All-Share index was up 2.38 points, 0.2%, at 1,092.60.

The Cboe UK 100 index was 0.9% higher at 753.86. The Cboe 250 was up 0.2% at 19,728.41, and the Cboe Small Companies was 0.1% higher at 15,394.15.

In mainland Europe, the CAC 40 stock index in Paris was up 0.5% and the DAX 40 in Frankfurt was 0.2% higher. Asian equities rose on Friday.

The Nikkei 225 in Tokyo rose 0.7% and the S&P/ASX 200 added 0.6%.

The Hang Seng in Hong Kong, having been closed since Monday, ended up 3.2%. The stock market in Shanghai remained close on Friday as the Chinese New Year public holiday continues on the mainland.

"The stomach churning rollercoaster ride on the financial markets is set to continue, with a lurch back upwards expected for indices in Europe and the US as encouraging results from Amazon and Snap laid the groundwork for a relief rally at the end of a tumultuous week," Hargreaves Lansdown analyst Susannah Streeter commented.

Meta suffered a 26% share price decline on Thursday. The stock clawed back 1.6% after hours.

"When Facebook loses a chunk of value bigger than the size of any company listed on the FTSE 100 it demonstrates just how sensitive tech investors are right now to a whiff of weakness, but also the astronomical gains the tech giants made during the pandemic," Streeter added.

More positively, Amazon, which had lost 7.8% in the main trading session on Thursday, rose 14% after hours following a strong set of quarterly results.

For the three months to December 31, Amazon said total net sales were up 9% to USD137.41 billion from USD125.56 billion in the fourth quarter of 2020. Fourth quarter net income rose to USD14.32 billion from USD7.22 billion a year earlier.

The pound was weaker early Friday, giving back gains made following the Bank of England's latest monetary policy decision,

The pound was quoted at USD1.3583 early Friday, down from USD1.3616 at the London equities close on Thursday. The euro stood at USD1.1446, up from USD1.1425. Against the yen, the dollar was trading at JPY115.13, up from JPY114.85.

Friday's economic calendar includes eurozone and UK construction PMIs at 0830 GMT and 0930 GMT, respectively. The US nonfarm payrolls figure for January takes centre-stage at 1330 GMT.

Wage growth will be closely-eyed, as inflationary worries continue, Swissquote analyst Ipek Ozkardeskaya commented.

"The wages growth will be more important than the number of nonfarm jobs added to the US economy at today's release, because first, we know that the December numbers are heavily shaken by the omicron wave and it's not representative of the overall health of the US jobs market, and second, even if we see a negative NFP print, it won't matter much for the Federal Reserve expectations," Ozkardeskaya explained.

"But the wages growth is important, as higher wages mean a stickier inflation and a stickier inflation means a more hawkish Fed policy, and a more hawkish Fed policy means less liquidity and less appetite for investors."

On the London Stock Exchange, Shell shares rose 3.1%, bolstered by higher crude oil prices and strong annual results posted on Thursday. BP added 2.3%, the next best performer.

Brent oil was quoted at USD91.82 a barrel early Friday, up sharply from USD89.45 at the London equities close on Thursday. Gold stood at USD1,808.41 an ounce, up from USD1,805.70.

Airtel Africa added 0.8%. The Africa-focused telecommunications services provider have grown so far in its financial year.

Third-quarter revenue rose 18% annually to USD1.22 billion from USD1.03 billion. Pretax profit was 49% higher at USD297 million from USD200 million.

For the nine months, revenue was up 23% to USD3.49 billion, while pretax profit surged 79% to USD864 million.

Airtel's customer base grew by 5.8% and now stands at 125.8 million.

SSP shares rose 2.4%, with the travel food and beverage outlets operator providing a somewhat mixed trading update.

Upper Crust-owner SSP said overall sales in the eight week to January 30 were at 57% of pre-virus levels.

In the first nine weeks of its financial year, which runs to September 30, 2022, sales had been at 66% of 2019 levels.

"The spread of the Omicron variant around the world and the subsequent government restrictions have inevitably had an impact on passenger numbers in many of our market," SSP explained.

"Trading remained resilient during December and throughout the holiday period, before softening in early January."

Fortunes recently have been "more encouraging", however, as government curbs are lifted.

SSP noted that during its first quarter, it was profitable at an underlying earnings before interest, tax, depreciation and amortisation level.

Elsewhere in London, West Africa-focused oil and gas producer Tullow Oil rose 4.0%, after Barclays lifted the stock to Overweight from Equal Weight.

DX Group, whose shares are suspended, has fallen out with auditor Grant Thornton. Grant Thornton has resigned as the parcel freight, secure courier and logistics provider's auditor.

Slough, England-based DX said it had been in discussions with Grant Thornton over the pace of the inquiry, which is holding up the audit of its financial 2021 accounts.

According to DX, Grant Thornton said it resigned over concerns about potential breaches of law by DX employees and the provision of inaccurate information that didn't "give a full picture of the scale and seriousness of the facts".

DX said it disagrees with the reasons given by Grant Thornton and will provide further commentary in "due course".

DX Group shares have been suspended since the start of 2022 due to the late accounts.

By Eric Cunha; ericcunha@alliancenews.com

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