FTSE 100 rises to five month high as Ocado delivers
Ocado chief executive Tim Steiner said the firm is coping well despite a fire.
The FTSE 100 touched heights last seen in October on Tuesday, boosted by a strong performance from online grocer Ocado.
London’s top flight closed the day up 24.81 points, or 0.34%, at 7,324, following global peers higher ahead of the US Federal Reserve’s meeting.
“Major equity benchmarks like the FTSE 100, DAX and CAC 40 have reached five-month highs as traders are in risk-on mode.
“There hasn’t been any major macroeconomic or geopolitical news, dealers are looking ahead to the Fed’s two-day meeting, which starts today.
“The consensus estimate is that the Fed will keep rates on hold, and some traders feel the language the Fed will use will be neutral, and that has raised investor confidence today,” according to David Madden, market analyst at CMC.
In stocks, Ocado was top of the pack, gaining 61.5p to close the day at 1,209p.
It came after the online grocer laid bare the impact of a fire that ripped through its Andover warehouse, insisting the incident was only a “temporary” setback.
The online grocer saw revenue rise 11.2% to £404 million in the 13 weeks to March 3.
This was slower than anticipated due to the closure of the Andover customer fulfilment centre (CFC) after the fire broke out in early February, with the impact equivalent to 1.2% of sales.
Without the fire, growth would have been about 12.4%, meaning the group missed out on about £4.5 million of income.
But Ocado’s chief executive Tim Steiner insisted that the company was on top of the situation.
Sainsbury’s shares were also trading higher after the supermarket hit out at the competition watchdog over its £12 billion merger with Asda.
The company claimed there are serious flaws with the Competition and Markets Authority’s report into the deal, and argued the tie-up will deliver £1 billion in savings for shoppers.
The CMA last month warned the deal could be blocked unless the pair sell off a significant number of stores, or even one of the brands.
Sainsbury’s shares closed up 2p at 236.9p.
Sterling was up 0.3% against the US dollar at 1.328 at the London market close, and had advanced 0.1% versus the euro at 1.169.
Brexit, again, was the dominant theme as Theresa May’s Conservative Government continues to botch Britain’s exit.
The Prime Minister will now request from the EU an extension to the process after she was humiliated by Speaker John Bercow, who ruled that she cannot bring her discredited deal before Parliament for a third time.
“GBP/USD is a little higher on the back of the solid economic indicators from the UK, and there is optimism that Brexit will be postponed. The UK unemployment level dropped to its lowest level since the 1970s.
“There is a growing belief that Article 50 will be extended, and that is helping the pound too,” Mr Madden added.
In Europe, Germany’s DAX close up 1.13% and France’s CAC 40 was 0.25% higher.
A barrel of Brent crude was changing hands at 67.4 US dollars, broadly flat.
The biggest risers on the FTSE 100 were Ocado up 61.5p at 1,200p, Informa up 26.6p at 747.8p, Smurfit Kappa up 72p at 2,288p and DCC up 200p at 6,565p.
The biggest fallers on the FTSE 100 were Evraz down 24p at 606p, RELX down 26p at 1,646p, Standard Chartered down 7.1p at 610.7p and Rentokil down 3.3p at 347p.