Daily market update: gold, UK tech shares, Trustpilot, Close Brothers

“The FTSE 100’s recovery from a dip earlier this month continued with pace,” says Russ Mould, Investment Director at AJ Bell.

“Investor risk appetite is tentatively returning, as evidenced by miners leading the charge and people buying the recent dip in retailers. However, investors aren’t diving headfirst into the deep end. They’re taking things slowly, hence why banks and their reassuring dividends were also in demand.

“The fact gold hit another new record high also shows that investors are hedging their bets. They might be increasing equities exposure, but they’re also adding a form of insurance to portfolios. Gold briefly hit $3,026, continuing a strong run for the precious metal amid a weakening dollar and concerns that Donald Trump’s policies are going to cause economic havoc both in the US and abroad.

“Germany’s Dax jumped 0.5% ahead of a parliamentary vote on debt reforms that are key to a significant ramp-up in borrowing to drive economic growth in the country. Big spending is expected on infrastructure investments and defence.

“Hong Kong shares hit a three-year high as investors rekindle their love for China. Beijing moved up a gear last year with economic stimulus measures and despite initial concerns these wouldn’t have a long-lasting effect, recent data has been more encouraging. Even though China is one of Donald Trump’s main targets for tariffs, the behaviour of stocks in this part of Asia don’t suggest major concerns over a trade war.

“Investors have been loading on companies that do businesses that aren’t reliant on exports in the hope that government policies and stimulus measures drive greater domestic activity. For example, shares in tech and e-commerce firms Baidu, Alibaba and Tencent have surged this year as investors warm to the prospect of Chinese giants embracing AI.

“The UK stock market isn’t known for its mega cap technology constituents but there are plenty of names further down the market cap spectrum. The UK is very good at nurturing smaller tech companies and investors comfortable with sifting through small and mid-caps might find more opportunities than the market’s reputation suggests.

“There was a trio of stock market winners in the tech space on Tuesday, all enjoying double-digit share price gains. Bytes Technology issued a bullish trading update and reported ‘high demand’ for its software and services. Trustpilot was equally upbeat as it reported full-year results. Computacenter rounded off the set with news that its second half period in 2024 was the most profitable in its history.”

Trustpilot

“Making sure you’re buying from a reputable vendor on the internet is a must for most of us, given how many purchases are now made online, and that’s something customer feedback platform Trustpilot is increasingly tapping into.

“For the second time this year the company has delivered upgrades and its full-year results are garnering a five-star rating from investors.

“Thousands of businesses now turn to Trustpilot for customer transparency and the underlying consumer data analytics it provides to clients.

“This creates valuable network benefits. The more consumers that use the platform and share their own opinions, the richer the insights the company can offer.

“Done well, this creates a virtuous circle where consumers feel drawn to Trustpilot because it is where meaningful services are listed and reviewed, and the more consumers who use Trustpilot, the more businesses will feel they can’t afford to not be on the platform.

“In this context, the big increase in number of active reviews in 2024 is highly significant. The company is in the early stages of profitability – having just reported its first annual statutory profit — but a £20 million share buyback is a show of confidence in its future prospects along with the upgraded guidance for 2025.

“Trustpilot endured an up and down start to life on the stock market after listing in 2021 but over the last couple of years, the shares have started to gather momentum.”

Close Brothers

“Close Brothers has been in the motor finance business for more than 30 years but the mis-selling scandal it is now caught up in means the near 150-year-old institution will be rueing the day it ever got involved.

“The provision taken in February has tipped the company into a big loss and steered a recovering share price off course. Hopes the government might step in to limit the pain for the likes of Close have been somewhat frustrated and the next milestone is a Supreme Court date to hear appeals against the initial rulings from the Court of Appeal.

“It looks like a result will come over the summer and shareholders will be watching nervously to find out the scope of redress Close Brothers is likely to face. Weak guidance on the key net interest margin metric will have done nothing to reassure shareholders on the long-term prospects for the business.

“In terms of what it can control, the company has suspended dividends and is trying to scale back costs, with the sale of the asset management business providing an injection of capital when it completes later this year. Close Brothers looks set to emerge from this crisis as more of an old banger than a well-oiled machine.”

These articles are for information purposes only and are not a personal recommendation or advice.