Flat day for FTSE 100 as stronger pound and Ocado fire weigh on index
Equities were largely unchanged due to a lack of major economic news.
The FTSE 100’s winning streak came to an end on Wednesday due to caution on the global markets and a stronger pound, while Ocado’s stock market fortunes took a turn for the worse after a warehouse fire.
Weekly Business Digest Newsletter
The blue-chip index was flat, closing 4.28 points lower at 7,173.09.
Fiona Cincotta, senior market analyst at City Index, said a lack of firm updates on simmering trade tensions between China and the US had contributed to a more cautious mood on the markets.
“The FTSE snapped a six-day winning streak on Wednesday after Trump dented risk appetite with his nothing new State of the Union Address last night,” she said.
“Traders had been optimistic that Trump would provide further details on developments in US–Sino trade relations, instead little sign of progress saw investors adopt a more cautious approach to trading on Wednesday.”
A stronger pound added to the pressure on London’s top stocks. Sterling was up 0.28% against the euro at 1.138 and 0.09% up on the US dollar at 1.295, despite the deadlock in Brexit negotiations and Donald Tusk’s comments that there is a “special place in hell” for those who pushed for Brexit with no plan in place.
David Madden, market analyst at CMC Markets UK, said: “It has been a quiet day for sterling in terms of economic announcements. The Bank of England interest rare decision tomorrow will be in focus. Some traders believe the UK central bank won’t hike rates this year, regardless of Brexit as the latest UK data has pointed to a slowdown.”
Ocado, which performed well on the stock market yesterday following its annual results, suffered a change in fortunes after it warned sales figures could be impacted by a fire at its Andover facility.
Shares dropped 65.6p to close at 968.4p as the company said the shutdown of the warehouse means there will be a “constraint on our ability to meet our growing customer demand”.
Meanwhile, Barratt Developments reported a rise in half-year sales and profits as it continues to shrug off Brexit pressures hitting the wider property market.
Shares in the country’s largest housebuilder were bolstered by the news, rising 15.4p to 561.8p.
However fellow housebuilder Redrow warned that Brexit uncertainty had started to eat into its sales, even as it posted record half-year profits.
The group reported a 9% rise in sales to £970 million in the six months to December 31, while pre-tax profit rose 5% to £185 million.
Shares inched up 1p to 593p.
On the oil markets, a barrel of Brent crude was trading 0.8% higher at 62.58 US dollars.
Oil prices were climbing after data showed a smaller rise in US stockpiles of crude than expected.
In Europe, the French Cac was down 0.08% and the German Dax fell 0.38%.
The biggest risers on the FTSE 100 were RSA Insurance up 15.2p to 532.4p, Barratt Developments up 15.4p to 561.8p, Evraz up 13.6p to 528p and Hiscox up 31p to 1,469p.
The biggest fallers on the FTSE 100 were Ocado down 65.6p to 968.4p, Tui down 27p to 1,184p, Rightmove down 8.35p to 471.8p and Reckitt Benckiser down 103p to 5,857p.