London close: Stocks eke out gains, Ocado finishes weaker

London stocks were barely in the green by the close on Tuesday, with online supermarket Ocado finishing weaker after its full-year results.

The FTSE 100 ended the session up 0.12% at 6,531.56, and the FTSE 250 was 0.13% firmer at 21,112.94.

Sterling was in a mixed state, last trading 0.41% stronger against the dollar at $1.3797, but weakening 0.05% on the euro to change hands at €1.1398.

“It has been a directionless trading session as the bullish mood that has been circulating recently has faded, hence why European equity benchmarks are mixed,” said CMC Markets analyst David Madden.

“Volatility is low as there wasn’t much in the way of major macroeconomic news to trigger excitement in one direction or another.”

Madden said that in recent sessions, sentiment had been dictated by the prospect of the Biden administration signing off on the $1.9trn stimulus package without backing from Republicans.

“The story is still relevant but it has lost some of its sway over the markets.

“Things are looking up for the EU with regards to the health crisis as the trading bloc is in the process of securing a vaccination deal with Pfizer-BioNTech, in which it will receive 300 million vaccines.

“This should help with its vaccination rates, which are way behind that of the UK.”

Investors were mulling figures released earlier by the British Retail Consortium, which showed retail sales rose in January at the slowest pace since the depths of the first Covid-19 lockdown as non-essential spending was hit by consumer concerns.

Total retail sales fell 1.3% in January as like-for-like sales rose 7.1% from a year earlier.

In the three months to January, in-store sales of non-food items dropped 36.5% and by 20% on a like-for-like basis.

Food sales rose 7.5% on a like-for-like basis and 7.9% overall.

“January saw retail sales growth decline to its lowest level since May of last year,” said BRC chief executive Helen Dickinson.

“The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending - especially on clothing and footwear."

In equity markets, Ocado fell 1.68% despite reporting a 68.8% rise in full-year core earnings.

“It appears investors have potentially been put off by Ocado’s planned £700m in capital expenditure, and a subdued outlook for UK retail growth in the coming 12 months,” said Spreadex analyst Connor Campbell.

Richard Hunter, head of markets at Interactive Investor, said the combination of a grocer benefiting from the current pandemic and a high-tech business gave investors “two bites at the cherry”.

“The stratospheric rise of the share price may have prompted some to take profits, with the market consensus of the shares having recently slipped to a sell as new developments are awaited.”

TUI was 4.01% lower after the travel company slumped to a €699m first-quarter loss as Covid-19 lockdowns continued to hammer demand.

Going the other way, Micro Focus gained 6.57% after the software firm reinstated its dividend, despite a near $3bn impairment charge pushing it deep into the red.

Electrocomponents rallied 2.65% after an upgrade to ‘overweight’ at JPMorgan, while Spirent Communications was boosted 5.14% by an upgrade to ‘buy’ at Canaccord.

Bellway rose 2.97% after the housebuilder hailed record first-half completions amid "robust" demand.

Sector peers Taylor Wimpey and Berkeley also pushed higher, by 2.57% and 2%, respectively.

Market Movers

FTSE 100 (UKX) 6,531.56 0.12%
FTSE 250 (MCX) 21,112.94 0.13%
techMARK (TASX) 4,149.58 0.59%

FTSE 100 - Risers

Taylor Wimpey (TW.) 165.90p 2.57%
Prudential (PRU) 1,271.00p 2.42%
Berkeley Group Holdings (The) (BKG) 4,392.00p 2.00%
Imperial Brands (IMB) 1,469.50p 1.84%
Intermediate Capital Group (ICP) 1,803.00p 1.69%
United Utilities Group (UU.) 912.00p 1.54%
BAE Systems (BA.) 479.80p 1.52%
Pennon Group (PNN) 929.40p 1.51%
Pearson (PSON) 733.00p 1.44%
Hargreaves Lansdown (HL.) 1,649.50p 1.38%

FTSE 100 - Fallers

Evraz (EVR) 506.00p -3.36%
International Consolidated Airlines Group SA (CDI) (IAG) 153.90p -3.33%
Experian (EXPN) 2,533.00p -3.32%
Kingfisher (KGF) 270.40p -2.38%
JD Sports Fashion (JD.) 809.20p -2.32%
Melrose Industries (MRO) 173.00p -2.23%
Bunzl (BNZL) 2,317.00p -2.16%
Relx plc (REL) 1,797.50p -1.75%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,766.00p -1.75%
Ocado Group (OCDO) 2,700.00p -1.68%

FTSE 250 - Risers

Micro Focus International (MCRO) 524.00p 6.57%
Spirent Communications (SPT) 245.50p 5.14%
Morgan Advanced Materials (MGAM) 315.00p 4.13%
Mitchells & Butlers (MAB) 357.00p 3.92%
Clarkson (CKN) 2,665.00p 3.90%
Network International Holdings (NETW) 351.20p 3.60%
Beazley (BEZ) 371.80p 3.28%
Greencore Group (GNC) 126.90p 3.17%
Hays (HAS) 149.10p 3.04%
Ashmore Group (ASHM) 479.60p 3.01%

FTSE 250 - Fallers

easyJet (EZJ) 788.00p -4.51%
Trainline (TRN) 448.80p -4.18%
IWG (IWG) 345.00p -4.06%
TUI AG Reg Shs (DI) (TUI) 318.00p -4.01%
XP Power Ltd. (DI) (XPP) 5,060.00p -3.77%
Carnival (CCL) 1,317.50p -3.76%
HICL Infrastructure (HICL) 168.40p -3.44%
Rank Group (RNK) 133.60p -3.44%
Airtel Africa (AAF) 77.20p -3.38%
Watches of Switzerland Group (WOSG) 662.00p -3.37%