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Miners and oil stocks boost FTSE as Ocado hits record high

Miners and oil stocks boost FTSE as Ocado hits record high

Miners and oil majors have driven the FTSE 100 higher, while shares in online supermarket Ocado (OCDO) rose to a record high on strong first-quarter sales.

The UK blue-chip index was up 27 points, or 0.4%, to 7,327 as oil majors continued to rise amid Opec supply cuts and US sanctions against Iran and Venezuela.

Brent crude futures were up 0.3% to $67.74 a barrel, pushing up shares in Shell (RDSb) and BP (BP) by 0.3% to £24.37 and 0.8% to 558.5p respectively.

Antofagasta (ANTO) rose 4.6% to 982.6p thanks to a higher-than-expected dividend payout, offsetting a drop in annual earnings.

Ocado climbed 3.1% to £11.84, as revenues grew 11% in the first quarter, as the online supermarket downplayed the impact of a fire at one of its main warehouses in Andover in February.

Ocado recently announced a tie-up with Marks & Spencer (MKS), replacing its current deal with rival supermarket Waitrose, and has partnered with US retail giant Kroger (KR.N). Ocado has also announced similar deals in Canada, Sweden and France.

‘Less positively, there is an element of execution risk as each deal progresses, whilst there remains the possibility of another giant edging into Ocado’s space, with the likes of Amazon being an obvious potential threat,’ said Richard Hunter, head of markets at online stockbroker Interactive Investor.

‘In addition, the group has decided to continue as a pure growth company, although the lack of a dividend thus far and perhaps into the foreseeable future has been more than offset by a meteoric price rise for investors.’

The FTSE 250 was up 10 points, or 0.1%, to 19,497, despite continued Brexit uncertainty after parliament speaker John Bercow blocked prime minister Theresa May’s plan to put her twice-rejected deal to a third vote of MPs.

The pound held up, strengthening to $1.327 against the dollar.

Neil Wilson, chief market analyst at Markets.com, argued ‘the sanguine reaction in currency markets reflects the fact that no-one really knows where this leaves the Brexit story. This remains too tough to call either way'.

May is set to request an extension from EU officials on Thursday and Brexit secretary Stephen Barclay has indicated the government will push ahead with the prime minister’s deal, suggesting another vote could happen next week, according to reports.

Ferrexpo (FXPO) shares fell 9% to 246p, after a review into the iron ore pellet producer’s charitable donations found discrepancies, delaying the release of 2018 results.

However, Softcat (SCT) advanced 3.6% to 867p, as the IT firm added more customers and said annual results would be ahead of expectations.

Shares in Kier (KIE) rose 2.1% to 494.3p, as investors welcomed the news the embattled small-cap builder had appointed Andrew Davies as its new chief executive to help turn around the business. He replaces Hadyn Mursell, who stepped down as boss in January.

Davies was appointed as chief executive for outsourcer Carillion just weeks before it collapsed in last year. His appointment to the top role at Kier follows concerns over the firm’s mounting debt, with an accounting error discovered last week piling on an additional £40 million to its existing liabilities.

On the Alternative Investment Market, Asos (ASOS) shares dropped 5% to £30.50 as the online retailer highlighted difficulties in its new warehouse in Atlanta in the second quarter, hitting US sales.

The 13% sales growth for the period was well under the 25% the market had come to expect from Asos, said Hargreaves Lansdown senior analyst Laith Khalaf.

‘The slowing growth seems to be a result of weaker consumer confidence, while increased promotional activity suggests the competition is heating up too.

‘There’s now a lot of pressure on the next six months to bring Asos back up to what is a tepid growth rate by its own high standards.’

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