MARKET REPORT: Arm shares sink 14% in New York – the but UK chip designer is still bigger than all but 3 FTSE firms

Shares in British chip designer Arm fell sharply in New York – but it would still be the fifth biggest company in the FTSE 100 had it chosen to list in London.

The Cambridge-based technology giant has soared in value in recent weeks on the back of bumper results and excitement about artificial intelligence.

The stock peaked at a record $149 on Monday – valuing it at over £120billion – having listed on the Nasdaq exchange in New York at just $51 last year. But the shares fell more than 19 per cent yesterday as it gave up some of its recent gains.

Arm is still valued at around £98billion, however. That makes it one of the UK’s most valuable listed companies, behind Shell (down 0.3 per cent, or 7 p, to 2488.5 p) at £163billion, AstraZeneca (up 1 per cent, or 99 p, to 9600 p) at £149billion, HSBC (up 0.4 per cent, or 2.1 p, to 610.5 p) at £117billion and Unilever (flat at 3992.5 p) at £99billion.

The success of Arm since it listed in New York has rubbed salt in City wounds after a campaign to convince it to trade its shares in London fell on deaf ears. 

Down: Arm has soared in value in recent weeks on the back of bumper results and frenzied excitement about artificial intelligence. But shares fell 13.9% as it gave up some recent gains

Founded in 1990, Arm has long been hailed as a UK technology darling, designing microchips used in smartphones and other devices.

It was listed on both the FTSE 100 and Nasdaq before it was taken private by Japan’s SoftBank in a £26billion deal in 2016.

When it returned to the stock market last year, it chose New York despite lobbying from Prime Minister Rishi Sunak and the London Stock Exchange.

Dan Ives, tech analyst at Los Angeles-based wealth manager Wedbush, said: ‘Arm appears to remain a black eye for London.’

The fall in the Arm share price came as concerns about inflation and interest rates sent stock markets tumbling around the world. 

The FTSE 100 fell 0.81 per cent, or 61.41 points, to 7512.28 and the FTSE 250 lost 1.46 per cent, or 280.10 points, to 18,923.83 in London. 

Meanwhile, the S&P 500, Dow Jones Industrial Average and Nasdaq were all on the slide in New York.

Back in the City, Aston Martin shares were in focus amid hopes it is finally getting to grips with its huge debt pile. 

Stock Watch – Saietta

Shares in a company that makes parts such as motors for lightweight electric vehicles crashed to a record low after a lucrative deal fell through.

Saietta failed to agree terms on an electrical steering pump contract at its Sunderland facility. 

As a result, the company will sell a production line it no longer uses at the site for £600,000.

This will provide funds although further cash injections are required for Saietta to stay afloat. Shares tumbled 53.5 per cent, or 8.56 p, to 7.44 p.

The luxury car maker has spent the past few years shoring up its finances and brought in investors to help place the business on a firmer footing.

But Aston Martin faces having to repay more than £1billion of debt.

In a sign that progress is being made, chairman Lawrence Stroll told Bloomberg TV: ‘We are currently studying with our bankers the most appropriate actions of how to deal with it.’ Shares were unmoved at 174.2 p.

Defence stocks slipped, with Rolls-Royce down 0.9 per cent, or 2.8 p, to 306.3 p, BAE Systems off 0.9 per cent, or 11.5 p, to 1212.5 p and Qinetiq down 1.1 per cent, or 4 p, to 369 p. 

But George Zhao, an analyst at Bernstein, said pressure on Nato members – not least from US presidential hopeful Donald Trump – to increase defence spending should provide a boost.

He said: ‘This has been seen by many as a potential positive catalyst for European defence stocks.’

It was a strong session for GSK following a broker upgrade.

Investment bank Citi urged its clients to buy the pharma giant’s stock for the first time in seven years. 

Analysts said the blue-chip firm’s drug pipeline is strong, while the long-standing Zantac litigations should be settled within the next six months. Shares rose 1 per cent, or 15.4 p, to 1641.8 p.

Heading in the other direction was ITV. Mayfair-based fund Silchester International Investors, which also has holdings in Tesco (down 2.1 per cent, or 5.9 p, to 273.7 p), GSK and B&Q owner Kingfisher (down 2.3 per cent, or 5 p, to 215.8 p), has bought a 5 per cent stake in the broadcaster. 

But with ITV grappling with a slump in advertising spending, shares fell 2 per cent, or 1.16 p, to 57.32 p.

This post first appeared on Dailymail.co.uk