London midday: FTSE extends gains; Ocado surges on upgrade
London stocks had extended gains by midday on Wednesday, having taken their cue from an upbeat session on Wall Street.
The FTSE 100 was up 0.9% at 7,599.58 as investors eyed policy announcements from the European Central Bank and the Bank of England on Thursday.
Russ Mould, investment director at AJ Bell, said: "The rebound in US shares continued again last night, helping to lift investor confidence and that’s spread across Asia and Europe on Wednesday with another day of markets pushing ahead.
"While we’re still some way off reclaiming all the territory lost at the start of the year, the fact that equity markets have stabilised shows that investors still have an appetite for risk, and they are now sifting through the wreckage to see if there are any bargains to be had.
"Across the pond, Alphabet smashed expectations which led to a 9.2% jump in its share price in after-hours trading. Interestingly, it made more revenue from YouTube advertising ($8.6 billion) in the fourth quarter of 2021 than Netflix’s revenue for the same period ($7.7 billion). There is a significant cost difference between the two platforms in terms of creating content, suggesting that Alphabet is the true king of the streaming wars.
"PayPal’s shares slumped 17.9% in after-hours trading on Nasdaq after flagging a further slowdown in spending on its platform."
On home turf, market participants were digesting a survey showing that the rate of price rises in UK shops almost doubled in January, adding to pressure on the cost of living with more increases to come.
Shop-price annual inflation accelerated to a near-decade high of 1.5% from 0.8% a month earlier, the British Retail Consortium's survey showed. The rate of increase was higher than the six-month average rise of 0.1% and was the highest since December 2012.
The increase was driven by a 0.9% rise in non-food inflation, rebounding from a 0.2% decline in December. Furniture and flooring prices rose particularly fast because of strong demand and higher shipping costs.
Food-price inflation strengthened to 2.7% from 2.4% a month earlier. Fresh food inflation was little changed at 2.9% but the rate of price increases for ambient food rose to 2.4% from 1.7%. Prices were affected by poor harvests, labour shortages and rising global food prices.
The BRC said prices were likely to keep rising strongly. The trend will put further pressure on household budgets with domestic energy prices surging and an increase in national insurance contributions on the way.
BRC chief executive Helen Dickinson said: "The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow."
In equity markets, online supermarket Ocado surged to the top of the FTSE 100 after a double upgrade to ‘outperform’ by Credit Suisse, while Auto Trader rallied after an upgrade to ‘buy’ from ‘hold’ at Jefferies.
Telecoms giant Vodafone gained after it reported higher third-quarter services revenue, driven by growth in Europe and Africa as it reiterated annual guidance.
Gambling software group Playtech reversed earlier losses to trade sharply higher after saying it was unlikely shareholders would approve a takeover offer by Australia’s Aristocrat Leisure based on proxy counts, and that it was looking at "attractive alternatives" if the deal collapsed.
Molten Ventures, formerly Draper Esprit, was also on the rise after a well-received investment update.
On the downside, Chilean copper miner Antofagasta lost ground after a top policymaker in Chile indicated that the government would need to raise taxes amid concerns about inflation.
Elsewhere, BAE Systems was in the red after a rating downgrade at JPMorgan.
Market Movers
FTSE 100 (UKX) 7,599.58 0.85%
FTSE 250 (MCX) 22,407.71 1.08%
techMARK (TASX) 4,481.47 1.13%
FTSE 100 - Risers
Ocado Group (OCDO) 1,531.50p 7.02%
Entain (ENT) 1,683.00p 3.82%
Auto Trader Group (AUTO) 699.60p 3.55%
Vodafone Group (VOD) 132.14p 3.27%
Flutter Entertainment (CDI) (FLTR) 11,635.00p 2.83%
Halma (HLMA) 2,572.00p 2.72%
Aveva Group (AVV) 3,021.00p 2.65%
Spirax-Sarco Engineering (SPX) 13,625.00p 2.52%
Abrdn (ABDN) 246.20p 2.33%
Ashtead Group (AHT) 5,422.00p 2.30%
FTSE 100 - Fallers
Antofagasta (ANTO) 1,310.50p -3.75%
BAE Systems (BA.) 573.40p -1.21%
Rolls-Royce Holdings (RR.) 116.12p -0.94%
BP (BP.) 390.20p -0.79%
Polymetal International (POLY) 1,077.50p -0.37%
Avast (AVST) 608.60p -0.36%
Hikma Pharmaceuticals (HIK) 2,055.00p -0.34%
Kingfisher (KGF) 333.90p -0.21%
Fresnillo (FRES) 649.60p 0.00%
Burberry Group (BRBY) 1,888.50p 0.11%
FTSE 250 - Risers
Darktrace (DARK) 413.20p 6.11%
Playtech (PTEC) 606.00p 5.03%
Cineworld Group (CINE) 39.55p 5.02%
Molten Ventures (GROW) 823.00p 4.97%
Bytes Technology Group (BYIT) 485.40p 4.25%
Future (FUTR) 3,420.00p 4.20%
Discoverie Group (DSCV) 879.00p 4.02%
JPMorgan Japanese Inv Trust (JFJ) 566.00p 3.28%
Currys (CURY) 105.00p 3.24%
Centrica (CNA) 76.64p 3.15%
FTSE 250 - Fallers
Trustpilot Group (TRST) 176.90p -2.21%
Harbour Energy (HBR) 357.50p -2.16%
Caledonia Investments (CLDN) 3,665.00p -2.14%
TUI AG Reg Shs (DI) (TUI) 260.70p -0.99%
Contour Global (GLO) 191.00p -0.83%
Oxford Biomedica (OXB) 870.00p -0.68%
Petropavlovsk (POG) 15.10p -0.66%
Babcock International Group (BAB) 304.90p -0.65%
Moonpig Group (MOON) 317.40p -0.63%
Ultra Electronics Holdings (ULE) 2,938.00p -0.47%