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Pearson booms in short-squeeze as FTSE rides wave of Wall Street

Graeme Evans
·2-min read
<p>Microsoft's performance has raised the bar </p> (Reuters)

Microsoft's performance has raised the bar

(Reuters)

More lacklustre trading by London shares today provided a stark contrast with Wall Street excitement over the digital revolution boosting earnings of Microsoft and others.

Demand worries fuelled by the tightening lockdown restrictions meant heavyweight mining stocks including Rio Tinto and BHP fell more than 2%, leaving the FTSE 100 index 15.28 points lower at 6,638.24.

The pandemic has been more beneficial for tech giants including Microsoft, which reported record quarterly sales after Wall Street's closing bell on Tuesday as more people stuck at home has fuelled a surge in demand for its cloud services and games consoles.

Microsoft's performance has raised the bar on expectations ahead of tonight's eagerly-awaited update from Apple, which may smash $100 billion in quarterly sales for the first time.

In London, tech-led education publisher Pearson did its best to buck the trend as shares surged more than 18% in a major squeeze on short sellers. The FTSE 100-listed stock reached its highest level since July 2019, rising 135p to 896.2p in a dramatic session.

British Land also rose 28.6p to 469.8p and Sainsbury's surged 10.8p to 262.1p, helping to offset losses among some of London's more widely held stocks. As well as the miners, Barclays fell 2.1p to 137.34p and London Stock Exchange dropped 196p to 8,852p.

Mexico's Fresnillo was the biggest faller in the top flight, down 62p to 1,000.5p after forecasting lower gold output due to production difficulties at one of its mines.

A small rise in the price of Brent crude to just above 56 US dollars a barrel, following an unexpected fall in US stockpiles, bucked the downbeat commodities trend as BP held firm at just 1.15p lower at 281.15p.

The FTSE 250 index was 39.40 points higher at 20,487.76 , with Cineworld shares enjoying a much-needed bounce with a rise of 12% or 9.04p to 82.18p. British Gas owner Centrica also added 1.9p to 51.22p.

But there was further pressure on Royal Navy contractor Babcock International after this month's disclosure that it is carrying out a review of its balance sheet and contract profitability. Shares fell another 10.7p to 206.6p.

Read More

Pressure grows on Pearson over pay row, while sales steady