Power Metal Resources shares surged on Thursday after the diversified junior miner announced a strategic funding round to accelerate exploration activities.

The funding round is notable because it was completed at a premium to the priors day’s closing day – a commendable feat in the current market, paying testament to the strength of the group’s underlying minerals portfolio.

Power Metal Resources raised £1.3 million through issuing 130 million new ordinary shares at 1.0 pence per share, a 3% premium to the prior closing price.

The financing was cornerstoned by UK high net worth investors and a strategic Saudi Arabian investor. Funds will be deployed to accelerate exploration initiatives and corporate activities across the Power Metal group.

The company has exploration assets focused on a wide range of minerals including uranium, gold, copper, lithium, and graphite, among others.

Power Metal Resources shares were 23% higher at 1.2p at the time of writing.

Shell shares were higher in early trade on Thursday after the oil giant announced another bumper share buyback despite income and adjusted earnings sinking in 2023FY.

Lower oil prices were the main culprit in the falling adjusted earnings and revenue after Brent and WTI oil spent most of 2023 trading significantly beneath 2022 prices.

Shell shares were 2.3% higher at the time of writing on Thursday.

Adjusted EBITDA fell 19% to $68.5bn in 2023FY, and Adjusted Earnings fell 29% to $28.2bn.

However, Shell has again proved to be a cash-generation machine with a Free Cash Flow of $36bn. This is lower than last year but supports the company’s valuation, especially compared to US peers.

Shell will return cash to shareholders in the form of another $3.5bn share buyback and a $0.344 dividend for Q4 2023. The dividend increased from $0.331 in the last quarter.

As expected, the integrated gas unit was Shell’s powerhouse, with a strong performance in the fourth quarter, helping contain overall earnings decline in the unit for the full year.

Upstream, Shell’s largest unit concerned with oil extraction, fared better than some may have feared, with Adjusted Earnings growing 7% to $7.9bn in Q4. Upstream Adjusted EBITDA for the full year fell 27%.

The renewables unit still remains a sideshow for Shell, and Adjusted Earnings fell 60% in the full year.

UK stocks shook off the impact of disappointment surrounding big US tech earnings overnight and carved out minor gains on Wednesday ahead of the Federal Reserve Interest Rate decision this evening.

The FTSE 100 was up 0.3% at the time of writing and could become choppier as the session progresses.

Tonight’s announcement should be considered a high volatility event, not because of any changes in rates, but rather the press conference and comments on the trajectory of rates.

“Investors may be sitting on their hands as they await the latest decision from the Federal Reserve – a first interest rate cut hasn’t been pegged any earlier than March so all the focus will be on the messaging which accompanies the announcement,” said AJ Bell investment director Russ Mould.

“The Fed may encourage the recent scaling back of rate cut expectations and the extent to which it does could determine the path markets forge over the coming weeks.”

In addition to tonight’s Federal Reserve decision, traders were reacting to results from major tech companies, including Alphabet and Microsoft.

Expectations were huge going into results, and although both companies beat analyst forecasts, they did not beat to the degree some had been hoping for.

Microsoft was trading down 0.8% as Alphabet slid 5% at the time of writing.

GSK

In the UK, GSK reported a solid set of full-year results, sending shares higher by 3%. The company has been frustratingly range-bound and while the current update may not be the catalyst for this range to break to the upside, it does provide support for shares to trend to the top end of the range.

“GlaxoSmithKline (GSK) reported full year and fourth quarter results that look well up with analyst forecasts. Strip out the impact of falling Covid-related sales and underlying revenue growth for the full year and final quarter was 14% and 17% respectively,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.

“GSK sound confident in their statement, highlighting 71 Vaccines and Specialty Medicines now in clinical development, 18 of which have made it as far as phase III trials or beyond. Guidance for the coming year is for earnings growth of 6-9%, with a total dividend of 60p, up from 58p in the year just ended.”

Harbour Energy was the top faller after Goldman Sachs cut the shares to ‘sell’. Harbour Energy shares were down 5% at the time of writing.

Microsoft and Alphabet dealt equity traders a reality check last night after the two technology giants reported earnings overnight.

Shares in the two companies were slightly lower in the US premarket, not because the companies dramatically missed estimates – they both beat earnings forecasts – but because they didn’t beat to the extent that justifies the already frothy valuations expanding further.

Expectations were huge going into results, and there was a feeling that both companies needed to smash estimates out of the park to sustain a rally. This failed to materialise, and Microsoft was down 1.3%, while Google-owner Alphabet dipped 5.3% in US premarket trade.

Microsoft

Microsoft is investing heavily in AI, and its cloud business showed signs of strength in the cloud business, which was instrumental in driving the earnings beat.

Microsoft’s Q3 revenue came in at $62.02 billion, beating expectations of $61.12 billion. EPS was $2.93 per share, a decent best of the forecasted $2.78 per share.

“Microsoft’s numbers actually beat analysts’ forecasts, but their future guidance was not enough,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.

A cloudy outlook coupled with questions about the effectiveness of investment in AI returning future earnings growth dragged on shares.

“The market has been caught up in the exciting potential around AI but it has largely neglected to consider the costs required to exploit this potential until now,” said AJ Bell investment director Russ Mould.

“Microsoft’s latest earnings update flagged substantial investment as it looks to roll out AI across all areas of its business. There is no doubt this is the right move for Microsoft; investing in the business seems a much better use of its capital from an investor perspective than buying back shares, for example.

“Where the market will be closely scrutinising Microsoft is in how efficiently this money gets spent. Any sense the company is just throwing cash at AI willy-nilly and hoping some of it pays off would not go down too well. 

“Quarterly numbers came in ahead of expectations with strong growth in its cloud division as customers lap up a suite of services which have been augmented using AI.”

Alphabet

While there was quiet discontent with Microsoft’s earnings, investors were evidently disappointed with Alphabet’s results. Earnings and revenue did beat estimates, but only marginally.

Advertising sales growth was much lower than expected, which would have unnerved the market.

The move higher in the stock in the run-up to results suggested traders expected fireworks from Alphabet and felt let down when the numbers hit the wires.

“Last time it was the cloud computing arm causing a downpour on Alphabet’s results, now it is the advertising segment which has made investors switch off. Analysts had high hopes for Alphabet-owned Google and YouTube to scoop up bucket loads of cash from advertising but the group has fallen short of what was expected,” Russ Mould said.

“When you’ve been so successful in the past, expectations can be high and this is certainly the case for all of the Magnificent Seven group of stocks. Everyone expects these companies to pull a rabbit out of the hat every time they report and the slightest miss causes widespread disappointment, even if the actual numbers still showed positive gains on comparative periods.”