Ocado sales slow slightly, acquisition-hungry Bunzl buys Lightning Packaging

London open

The FTSE 100 is expected to open 15 points lower on Thursday, having closed down 0.05% at 7,496.51 on Wednesday.

Stocks to watch

Ocado reported slightly slower sales growth in the fourth quarter as a lack of delivery drivers put the brakes on capacity, though previous falls in the online grocer's average basket size were arrested. The FTSE 250 group generated revenue of £373.8m in the 14 weeks to 3 December, up 11.6% on the same period last year, which was a slowing from the 13.1% in the third quarter and 12.5% in the first half.

Bunzl said it was considering further acquisitions after the purchase of an industrial packaging company took its spending on takeovers this year to a record £600m.In a trading update the distribution and outsourcing group said it had bought Lightning Packaging, a UK supplier of boxes, tapes and other packaging products with annual revenue of £14m. It did not disclose the price.

Australia's competition regulator has warned that it is likely to block BP's proposed acquisition of Woolworths’ retail fuel business. BP management will consult with lawyers after the Australian Competition & Consumer Commission's decision as the oil giant believes it could sell off some of the outlets in order to avoid any competition issues.

IMI has agreed to acquire Bimba, a manufacturer of pneumatic, hydraulic and electric motion solutions with an extensive distributor network principally servicing the North American industrial automation market, it announced on Thursday. The FTSE 250 company said Bimba would become an “integral part” of IMI Precision Engineering, with the acquisition said to represent a “significant strategic step” for the division. Consideration for the transaction would be $198m (£148m) payable in cash on completion from existing bank facilities.

Newspaper round-up

Theresa May suffered her first Brexit defeat in the Commons last night as Tory “mutineers” ensured that MPs must approve the terms of Britain’s departure from the EU. The move prompted recriminations from Leave supporters who accused pro-Remain MPs of trying to delay or reverse the EU referendum result by creating the opportunity to reject the terms of withdrawal at a later date. - The Times

The British government is making a last-minute diplomatic push to persuade the EU to publicly and explicitly state its willingness to hold talks on post-Brexit trade before March next year. A draft statement due to be signed off by EU leaders on Friday, along with comments from senior officials and diplomats in Brussels, suggest substantive talks can only start in spring, once the EU has published its own plan for the future. - Guardian

The water regulator has promised the toughest clampdown on household bills since the industry was privatised 30 years ago. However, while shares in the listed water companies drifted toward two-year lows, having lost 20 per cent since the summer, prices may not fall by quite as much. Ofwat claimed the regime for setting water bills from the spring of 2020 will be the hardest yet for any privatised regulated utility in the country. - The Times

Deutsche Börse, the German stock exchange operator, is to consider the launch of a bitcoin future on its Eurex derivative exchange. A spokesman for the Frankfurt-based exchange, said it will take “some time” before a final decision is made. - The Times

The richest 0.1% of the world’s population have increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980, according to a report detailing the widening gap between the very rich and poor. The World Inequality Report, published on Thursday by French economist Thomas Piketty, warned that inequality had ballooned to “extreme levels” in some countries and said the problem would only get worse unless governments took coordinated action to increase taxes and prevent tax avoidance. - Guardian

US close

Stocks finished on a mixed note after two rate-setters dissented from the Federal Reserve's widely-expected decision to hike rates.

Investors were apparently also unimpressed by reports that Republicans in the House and Senate had agreed on the final version of a proposal for tax cuts.

By the close of trading in New York, the Dow Jones Industrial Average was 0.33% or 80.63 points higher to 24,585.43, albeit alongside a dip of 0.05% or 1.26 points to 2,662.85 on the S&P 500. In parallel, the Nasdaq Composite was ahead by 0.20% or 13.48 points to 6,875.80.

As expected, the Federal Open Market Committee decided to raise the range for the Fed funds rate by 25 basis points on Wednesday evening, to between 1.25% and 1.50%.

Policymakers also stuck by their projections calling for three more interest rate hikes in 2018, as they bumped up their forecast for GDP growth next year, to 2.5%, on the expected passage of Republicans' tax cut plans, the details of which were now expected later in the week.

However, two FOMC members, Chicago Fed chief Charles Evans and his opposite number in Minneapolis, Neel Kashkari, both dissented, instead casting their ballots in favour of no change in rates.

"Despite factoring in the imminent fiscal stimulus into their GDP growth projections for 2018, however, officials still anticipate only three more rate hikes next year. In contrast, we suspect that a slightly stronger rebound in inflation next year will ultimately persuade the Fed to hike rate four times in 2018," said Paul Ashworth, chief economist at Capital Economics.