London midday: Stocks extend gains amid bargain hunting; Ocado bucks trend
London stocks had extended gains by midday on Tuesday as investors stepped in to pick up some recently-battered shares, but Ocado bucked the trend after a discounted share placing.
The FTSE 100 was up 0.8% at 7,179.59.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘’A sprinkle of positivity is sugaring financial markets, masking the bitter taste induced as investors have been forced to assess the repercussions of surging inflation for the global economy.
"A mini snap back from the deep sell off last week is expected on US indices, after traders return from the Juneteenth holiday. This follows a wave of buying in Europe on Monday and Asia today as investors stepped into stocks pushed lower in the recent rout."
Investors were also digesting the latest survey from the Confederation of British Industry, which showed that manufacturing output slowed in the three months to June. The CBI’s total orders balance fell to +18 from +26 in May, coming in slightly below consensus expectations of +21.
CBI deputy chief economist Anna Leach said: "While manufacturing output is still being supported by a backlog of orders, growth appears to be softening. Stocks of finished goods are now seen as broadly adequate and we may be seeing the first signs that weaker activity is beginning to slow the pace of price increases in the sector.
"Manufacturers continue to report a range of challenges, including significant cost pressures, shipping delays, shortages of key inputs, and, not least, recruitment difficulties. Skills shortages remain widespread and are a key constraint on growth. All of these trends are weighing on confidence."
Meanwhile, the latest data from retail consultancy Kantar suggested that the average annual grocery bill is set to rise by £380 as surging inflation continues to push up prices. It also showed that like-for-like grocery prices had risen 8.3% over the past month, up 1.3 percentage points on May and the highest level since April 2009.
In equity markets, DS Smith was the top performer on the FTSE 100 as the packaging business posted significantly improved full-year profits despite "another year of volatile trading conditions".
Miners gained following heavy losses in the previous session, with Antofagasta, Rio Tinto and Glencore all higher, while oil giants BP and Shell gushed higher as oil prices rose.
Telecom Plus - better known under its trading name Utility Warehouse - rallied after it posted record full-year results amid strong demand, and lifted its FY23 profit expectations.
Educational publisher Pearson was boosted by an upgrade to ‘buy’ from ‘hold’ at Deutsche Bank, while Spire Healthcare pushed up after an initiation at ‘buy’ by Berenberg.
On the downside, Ocado slumped after the online supermarket said it had raised £575m in a share placing to fund its expansion. Just over 72.3m new ordinary shares were placed at 795p per share, with existing and new institutional investors. The placing price represents a discount of around 9.4% to the closing share price on Monday.
The online supermarket also raised an additional £3m selling shares to management and in an offer to retail investors.
Primark owner AB Foods was knocked lower by a downgrade to ‘neutral’ at JPMorgan.
FTSE 100 - Risers
Smith (DS) (SMDS) 291.30p 3.19%
Melrose Industries (MRO) 157.15p 3.15%
Rio Tinto (RIO) 5,267.00p 2.77%
Antofagasta (ANTO) 1,325.00p 2.63%
Pearson (PSON) 790.60p 2.41%
Mondi (MNDI) 1,494.50p 2.33%
Shell (SHEL) 2,159.00p 2.30%
St James's Place (STJ) 1,141.00p 2.24%
Intermediate Capital Group (ICP) 1,372.50p 2.23%
3i Group (III) 1,090.00p 2.20%
FTSE 100 - Fallers
Ocado Group (OCDO) 824.00p -6.11%
Associated British Foods (ABF) 1,617.50p -1.79%
Coca-Cola HBC AG (CDI) (CCH) 1,785.00p -1.19%
National Grid (NG.) 1,027.50p -1.01%
InterContinental Hotels Group (IHG) 4,299.00p -0.97%
Centrica (CNA) 80.18p -0.57%
Aveva Group (AVV) 2,426.00p -0.41%
Tesco (TSCO) 250.90p -0.40%
Admiral Group (ADM) 2,149.00p -0.37%
Sainsbury (J) (SBRY) 207.80p -0.29%
FTSE 250 - Risers
PZ Cussons (PZC) 202.00p 4.99%
Indivior (INDV) 294.00p 4.11%
JTC (JTC) 621.00p 4.02%
Auction Technology Group (ATG) 883.00p 4.00%
Currys (CURY) 80.80p 3.59%
Genuit Group (GEN) 401.50p 3.35%
Sirius Real Estate Ltd. (SRE) 95.30p 3.03%
Oxford Instruments (OXIG) 2,015.00p 2.91%
Watches of Switzerland Group (WOSG) 787.50p 2.87%
Aston Martin Lagonda Global Holdings (AML) 543.40p 2.84%
FTSE 250 - Fallers
ASOS (ASC) 849.50p -2.52%
Network International Holdings (NETW) 183.90p -2.23%
IntegraFin Holding (IHP) 239.60p -2.20%
Darktrace (DARK) 316.60p -2.10%
Chrysalis Investments Limited NPV (CHRY) 107.60p -2.00%
Polymetal International (POLY) 196.00p -2.00%
FDM Group (Holdings) (FDM) 892.00p -1.87%
RHI Magnesita N.V. (DI) (RHIM) 2,276.00p -1.73%
Hilton Food Group (HFG) 1,048.00p -1.50%
XP Power Ltd. (DI) (XPP) 2,895.00p -1.19%