FTSE 100 Live: Respite after interest rate jitters, Darktrace shares surge

Darktrace returns to form, tech stocks higher

A fightback for tech stocks was led by newcomer Darktrace today after the cyber security firm’s better-than-expected update sent shares surging by as much as a fifth.

The return to form for Cambridge-based Darktrace also reflected an easing of market jitters after high growth stocks were the subject of heavy selling at the start of 2022.

A 10% fall since November meant the tech-focused Nasdaq briefly touched correction territory yesterday as Wall Street investors increasingly factor in the US Federal Reserve hiking interest rates as many as four times this year, starting from March.

Today’s buy-on-the-dip trade meant the FTSE 100 index added 44.36 points to 7489.61, with Amazon and Tesla investor Scottish Mortgage Investment Trust recovering by 4% and online gambling company Flutter Entertainment up 4% or 435p to 11,575p.

Darktrace, which spent three months in the FTSE 100 after an initial 300% surge for its shares in the wake of its April flotation, rose 18% or 70.4p to 465.2p.

The stock had been as high as 495.2p at one point after it raised guidance for 2022 results, with annual recurring revenues growth now expected to be between 37% and 38.5% compared with 34%-36% previously forecast.

City firm Peel Hunt, whose bearish note spooked market sentiment just as the fast-growing company made its entry into the FTSE 100 index in September, removed its “sell” recommendation but still has a target price of 473p.

Analysts at Berenberg, however, said today’s update justified a return to the 1,000p briefly seen in the autumn, while counterparts at Jefferies have a 800p target after naming Darktrace as the best play on the growth opportunity in cybersecurity.

The FTSE 250 index lifted 188.68 points to 23,190.49, with Darktrace joined on the risers board by Micro Focus International after the enterprise software company jumped 11% or 45.5p to 462.4p.

Electrocomponents, which replaced Darktrace in the top flight in December, initially rose 5% after it raised profits guidance for the full year. Shares in the UK-based distributor of more than 500,000 industrial and electronics products were later 1% or 17p higher at 1192p.

Vets business Dechra Pharmaceutcials, which is another recent newcomer to the FTSE 100, lifted 78p to 4378p as it announced it had bought the worldwide rights to verdinexor, a treatment of all forms and stages of canine lymphoma in dogs.

Read More:FTSE 100 Live: Respite after interest rate jitters, Darktrace shares surge