London midday: FTSE pares gains as Ocado, Airtel Africa slide
London stocks had pared earlier gains to trade flat by midday on Tuesday, dragged lower by the likes of Ocado and Airtel Africa.
The FTSE 100 was steady at 7,576.56, having earlier hit its best level since January 2020.
Investors were digesting a survey showing that retail sales jumped last month, as shoppers sought out purchases ranging from watches to furniture.
According to the latest BRC-KPMG Retail Sales Monitor, total sales increased by 11.9% in January, compared to a 1.3% decline in January 2021, when the UK was in lockdown. On a year-on-two-year basis, total retail sales grew by 7.5%.
On a like-for-like basis, sales increased 8.1% compared to January 2021, when they rose 7.1%.
The British Retail Consortium said household appliances, electronics and homeware had performed well, as had furniture. Footwear and clothing, along with jewellery and watches, also performed strongly.
In comparison, food sales were muted, as restrictions brought in to tackle the spread of the Omicron variant were eased and people started eating out again.
In the three months to January, food sales decreased by 0.5% on a like-for-basis and by 0.1% on a total basis. That was below the 12-month total average growth of 2.4%.
Helen Dickinson, chief executive of the BRC, said: "It is encouraging to see such strong sales in January, even once inflation has been accounted for. Furniture was the stand-out performance, after transport delays in the Christmas period began to ease."
However, looking ahead she cautioned: "Retailers and consumers face challenges in the coming months.
"Retailers face competition from other spending opportunities, as the public flood back to restaurants, cafes and live events. Furthermore, rising inflation - driven by higher costs of production, higher energy and transport prices as well as other looming price hikes - will mean consumers will have to tighten their purse strings."
In equity markets, miners were the top performers as metals prices rose, with Antofagasta, Glencore, Anglo American and Rio all trading higher.
SSE rallied after it upgraded its full-year earnings expectations.
Elsewhere, oil giant BP gushed higher after saying it swung to a huge annual profit, driven by surging oil and gas prices, but warned of lower production and flat refining margins in the first quarter of the current year.
Housebuilder Bellway was in the black as it reported a solid first-half trading performance and strong underlying demand.
On the downside, online supermarket Ocado slid after it said its annual loss grew as increased investment in its solutions business more than offset higher revenue.
Airtel Africa tumbled after funds managed by Warburg Pincus and Morningstar Investment sold 58m shares in the telecommunications group in a discounted placing.
DCC lost ground even as it said third-quarter profit rose in line with expectations as the sales and marketing group's energy and healthcare businesses grew.
Micro Focus fell sharply after the software company said it was on track to deliver its FY23 goals and posted a narrowing of its full-year losses but a decline in revenues.
Travel company Tui also fell despite saying it expects pent-up demand to drive summer holiday bookings towards pre-Covid pandemic levels as it narrowed losses and planned to repay some of the German state aid it received during the crisis.
In broker note action, St James's Place and M&G were both high risers after an upgrade to ‘overweight’ at Morgan Stanley.
Virgin Money was on the up after HSBC lifted its price target on the shares.
BAE Systems was lifted by an initiation at ‘buy’ at Jefferies, while JD Sports was boosted by an upgrade at Exane BNP Paribas. However, retailers Marks & Spencer and WH Smith were both knocked lower by rating downgrades at Exane.
Market Movers
FTSE 100 (UKX) 7,576.56 0.04%
FTSE 250 (MCX) 21,749.52 -0.22%
techMARK (TASX) 4,375.92 -0.98%
FTSE 100 - Risers
Glencore (GLEN) 419.25p 2.81%
Evraz (EVR) 467.70p 2.79%
Anglo American (AAL) 3,472.50p 2.65%
St James's Place (STJ) 1,549.50p 2.01%
Rio Tinto (RIO) 5,624.00p 1.96%
International Consolidated Airlines Group SA (CDI) (IAG) 164.10p 1.86%
Polymetal International (POLY) 1,068.50p 1.67%
Antofagasta (ANTO) 1,253.00p 1.58%
BT Group (BT.A) 195.90p 1.42%
Persimmon (PSN) 2,433.00p 1.33%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,255.00p -10.80%
Airtel Africa (AAF) 140.50p -9.35%
Aveva Group (AVV) 2,791.00p -2.85%
Auto Trader Group (AUTO) 637.20p -2.57%
DCC (CDI) (DCC) 6,300.00p -2.48%
London Stock Exchange Group (LSEG) 7,052.00p -1.89%
Sage Group (SGE) 696.60p -1.83%
Flutter Entertainment (CDI) (FLTR) 10,810.00p -1.77%
Reckitt Benckiser Group (RKT) 5,747.00p -1.76%
Croda International (CRDA) 7,522.00p -1.57%
FTSE 250 - Risers
Virgin Money UK (VMUK) 202.20p 3.61%
easyJet (EZJ) 671.00p 3.29%
SSP Group (SSPG) 280.30p 2.60%
Future (FUTR) 2,904.00p 2.47%
Carnival (CCL) 1,450.80p 2.24%
Homeserve (HSV) 764.00p 2.21%
Petropavlovsk (POG) 14.84p 2.20%
Drax Group (DRX) 620.00p 2.14%
Clarkson (CKN) 3,420.00p 1.79%
Wizz Air Holdings (WIZZ) 4,276.00p 1.66%
FTSE 250 - Fallers
Micro Focus International (MCRO) 395.30p -13.52%
TUI AG Reg Shs (DI) (TUI) 248.70p -4.42%
Auction Technology Group (ATG) 931.00p -3.32%
Kainos Group (KNOS) 1,525.00p -3.05%
Tate & Lyle (TATE) 707.00p -2.32%
Aston Martin Lagonda Global Holdings (AML) 1,105.00p -2.30%
Genus (GNS) 3,582.00p -2.29%
UK Commercial Property Reit Limited (UKCM) 81.50p -2.28%
Oxford Biomedica (OXB) 812.00p -2.17%
Petershill Partners (PHLL) 213.50p -2.06%