What to Watch: European rebound continues, BA cancels flights, and Apple earnings

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Strong iPhone sales buoyed Apple's first quarter earnings. Photo: REUTERS/Jason Lee

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

European markets continue rebound

European markets continued to eke out gains on Wednesday, despite continued fears about the spread of coronavirus.

The FTSE 100 (^FTSE) was flat, the DAX (^GDAXI) was up 0.1%, and the CAC 40 (^FCHI) in France was up by 0.5%.

Neil Wilson, chief markets analyst at Markets.com, said investors were “seeking fresh direction from the Fed meeting later, developments in China with the coronavirus, and a raft of corporate earnings on Wall Street.”

Boeing, McDonald’s, Tesla and Microsoft all report late today and the US Federal Reserve will take its latest interest rates decision.

Europe’s gains came despite a slump in Hong Kong overnight. The Hang Seng (^HSI) closed down 3%. The Shanghai Composite (000001.SS) remained closed, while Japan’s Nikkei (^N255) ended up 0.7%.

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British Airways suspends China flights

British Airways on Wednesday said that it had suspended all flights to and from mainland China amid increasing fears about the spread of coronavirus.

“We apologise to customers for the inconvenience, but the safety of our customers and crew is always our priority,” British Airways said.

The move comes after the Foreign Office warned late on Tuesday that Britons should avoid all but essential travel to the country. US authorities have also issued similar guidance.

There have now been more than 5,700 cases of the virus in China, while the death toll has climbed to 132.

British Airways operates flights to both Beijing and Shanghai from the UK. Flights to these cities have been suspended until March, the airline said.

Shares in IAG (IAG.L), the owner of British Airways, were up by more than 0.5% on Wednesday morning, having fallen sharply earlier in the week.

Apple enjoys record earnings

Apple (AAPL) reported its 2020 first quarter earnings results on Tuesday, and beat Wall Street analysts’ top and bottom line estimates thanks to strong sales through the 2019 holiday shopping season.

The tech giant reported revenue of $91.8bn in the quarter, versus analyst expectations of $88.4bn. iPhone revenue smashed expectations, coming in at $55.96bn against forecasts of $51.50bn.

Second quarter guidance was also above expectations for the tech giant, coming in at $63bn to $67bn compared to Wall Street estimates of $62.33bn.

“We are thrilled to report Apple’s highest quarterly revenue ever, fuelled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” Tim Cook, Apple’s CEO, said in a statement.

“Apple is in the midst of a perfect storm, with current iPhone performing above plan, non-iPhone (especially wearables) trending strongly and growing anticipation for 5G iPhones that will be coming late in the fiscal year,” analysts at Piper Sandler wrote.

The company’s stock was up about 3% shortly after the announcement.

Santander’s UK profit slips

Santander UK (BNC.L) has posted a 37% drop in pre-tax profits to £981m, blaming a £169m hit for payment protection insurance (PPI) claims and a costly overhaul plan.

The bank’s 2019 results were impacted by a surge in PPI claims ahead of the August deadline, as well as charges for reorganising its branch network and cutting jobs.

But efforts to become more competitive in mortgages helped it notch up its highest growth in home loans for a decade.

The Spanish-owned group said it remained “somewhat cautious” over the outlook for 2020 as economic growth is set to be subdued and amid ongoing intense competition in the sector.

“The environment for the banking sector remains challenging, with ongoing competitive pressures and a demanding regulatory agenda,” chief executive Nelson Bostock said in a statement.

Ovo Energy fined

Energy regulator Ofgem has fined challenger brand Ovo Energy £8.9m, after some customers were overcharged and provided with inaccurate information.

Ofgem said Ovo has agreed to pay the fine and said the issues were caused by problems with Ovo’s IT systems. The regulator said Ovo sent inaccurate annual statements to more than 500,000 customers between July 2015 and February 2018.

“The supplier did not prioritise putting these issues right whilst its business was expanding,” said Anthony Pygram, director of conduct and enforcement at Ofgem.

“Our enforcement action sends a strong message that suppliers must get basic services right for all their customers.”

UK house prices rise

Annual house price growth in Britain hit its highest rate in more than a year this month, new figures show.

Prices were 1.9% higher than a year earlier for the average British property sold with a Nationwide mortgage in January, topping analysts’ expectations.

It marked the fastest annual rate of growth since November 2018, with sales and price growth relatively stagnant in recent years amid Brexit uncertainty and higher property taxes.