Ocado strikes deal with US grocer Kroger, full-year profits rise for National Grid

London open

The FTSE 100 is expected to open 10 points lower on Thursday, having closed up 0.15% at 7,734.20 on Wednesday.

Stocks to watch

Ocado Group has won a contract with US grocery giant Kroger to exclusively provide its online grocery expertise across multiple distribution warehouses across America. Kroger will buy a 5% stake in the FTSE 250 company as well as paying monthly exclusivity and consultancy fees that Ocado said will "offset in part" the total fees expected to be agreed, while the pair will sign a services agreement including loans to fund the building of "multiple" warehouses across the US.

National Grid reported a 4% improvement in underlying operating profit in its full-year results on Thursday, to £3.5bn, and a 6% rise in constant currency, while its statutory operating profit was ahead 9%, also at £3.5bn. The FTSE 100 energy infrastructure operator said its underlying earnings per share were 60.4p for the year to 31 March - a rise of 3% on 2017 when adjusted for the separation of the Cadent gas distribution business on a proforma basis.

Private equity outfit 3i on Thursday said full year net asset value rose 724p a share from 604p as the return on shareholders funds fell to 24% compared to 36% in 2017. The group's total return for the year was £1.42bn compared with £1.59bn a year earlier.

Newspaper round-up

The transport secretary was under pressure to act over at least four struggling rail operators last night after announcing plans to renationalise services on the east coast main line. Chris Grayling was warned that other companies were in trouble after failing to improve rail services or attract enough passengers, amid suggestions that the entire privatised system must be overhauled. Those in the firing line include Northern Rail, South Western, Transpennine Express and Greater Anglia. - The Times

President Trump will use post-Brexit trade talks to force the NHS to pay more for prescription drugs in an attempt to lower prices for American patients that could cost Britain billions. A few weeks ago Theresa May refused to rule out opening up NHS services to private American companies as part of a trade deal. - The Times

The outsourcing giant Capita has put patients at risk of serious harm after taking over NHS England’s administration service, Whitehall’s spending watchdog has found. Failures resulted in 87 women being notified incorrectly that they were no longer part of the cervical screening programme and may have compromised patient safety, according to the National Audit Office (NAO). - Guardian

British-based clearinghouses should not be forced to move to the European Union after Brexit, a senior European Parliament lawmaker has said in a sign of a softening of Brussels’ hardline stance over the institutions' euro transactions. The EU is mulling changes to its rules for clearing houses, the majority of which are in London, which could lead the biggest being forced to establish EU headquarters. - Telegraph

Buy-to-let lending has fallen by a fifth over the past year as taxes on second homes, the removal of interest relief and tougher standards for lenders drained credit from the market. Lenders issued 5,500 buy-to-let mortgages for new purchases in March, a drop of 19.1 percent on a year earlier, according to UK Finance, the umbrella organisation for banks and building societies. The value of loans fell by 20 percent to £800 million. - The Times

The government will announced its final decision on whether to curb stakes on fixed-odds betting terminals (FOBTs) on Thursday, with the maximum bet widely expected to be cut to £2. The machines have become a focal point for campaigners’ concerns about problem gambling and the potential for racking up large losses on machines that currently allow players to bet £100 every 20 seconds. - Guardian

US close

Wall Street ended Wednesday in the green, even as investors keep an eye on bond yields and geopolitical concerns weigh on sentiment.

The Dow Jones Industrial Average was ahead 0.25% at 24,768.93, the S&P 500 added 0.41% to 2,722.46, and the Nasdaq 100 rose 0.6% to 6,929.97.

Stocks ended lower on Tuesday as the yield on the 10-year Treasury note crept back above 3% - to its highest point since 2011.

“Though the Fed's Williams reiterated his stance as regards the need for three to four rate hikes from the Fed this year, the move looks to have been prompted by a firm retail sales print for April (+0.3%) while March figures were revised to show growth of 0.8%,” noted analysts at Rabobank.

They added that the joint probability of a September and a December hike is now around 50%, higher than it has ever been this year.

Also weighing sentiment was news that North Korea has suspended talks with South Korea over the continuation of military drills with the US, and threatened to pull out of a planned summit with the US if it continues to pressure it to unilaterally abandon its nuclear weapons programme.