FTSE 250 movers: Ocado leads market after Amazon bid rumours

The FTSE 250 was firmly in the black on Tuesday, rising 152.56 points (0.96%) to 16,111.37 by mid-afternoon.

Vedanta Resources

832.60p

16:35 28/09/18

0.87%

7.20p

Shares in Ocado were flying as rumours of a bid from Amazon resurfaced.

The US internet retail giant was reported to be working on a potential approach for the FTSE 250 online grocer as part of its Amazon Pantry and Amazon Fresh plans for food deliveries in the UK, according to the Daily Mail, resuscitating a rumour that had also emerged earlier in the month. Ocado’s chief executive, Tim Steiner, has previously stated his enthusiasm to join forces with cash-rich Amazon.

Rumblings last year about Amazon's entry into the UK online grocery market have seen Ocado become the second most shorted stock in the FTSE and knocked its shares from 450p last summer to a year's intra-day low below 240p on Monday. In November, Amazon launched its Pantry service in Britain, offering customers a range of around 4,000 grocery and household products, but excluding fresh food. The following month, Amazon's UK boss Christopher North revealed plans to ramp up the e-tailer's UK grocery offering in 2016, with thousands of extra products added.

Evraz and Vedanta Resources also surged after worse-than-expected economic growth data from one of the world’s largest commodities consumers raised hopes of further stimulus measures.

China’s gross domestic product rose 6.8% in the fourth quarter compared to the same period a year ago, weakening from the previous quarter’s 6.9%. Analysts had expected GDP to remain unchanged from the third quarter and the government is targeting 7% growth. “There is also the fact that there is still plenty of scope for fiscal and monetary stimulus to plug any gaps that appear in the coming years during this period of transition, which occurs at a time when the country is also trying to liberalise its markets, something that has faced many challenges already and will likely continue to do so this year,” said Craig Erlam, senior market analyst at Oanda.

And a statement from Cairn Energy helped the share price rise after it said the company remains fully funded from existing financial resources to deliver its exploration and appraisal programme, and the group is confident that its tax dispute with India will be resolved.

The oil and gas exploration company said group net cash at the end of December was $603m (£422m), while forecast development expenditure for 2016 and 2017, taking the UK development projects through to cash flow generation, is $492m. Cairn said much of its spending would be focused on Senegal projects. The company said it was working closely with the government there and joint venture partners, operating a multi-well evaluation programme consisting of appraisal and exploration drilling in 2016. In addition, Cairn said it was pleased with the positive flow tests on the SNE-2 appraisal well confirming the commercial deliverability of the discovery.

On the other side of the ledger, Home Retail Group was in negative territory, bouncing back down following Monday’s confirmation it agreed to sell its Homebase division to Australia's Wesfarmers. The move, which will see the well-known brand disappear, is valued at £340m and will see one of Australia’s biggest retailing groups acquire the entire Homebase business including all its stores and dedicated distribution centres.

Once finalised, Wesfarmers will replace the Homebase brand with its Bunnings brand, which is well-known around Australia and New Zealand. Shareholders are set to receive around £200m in the deal, which is expected to be completed by the end of March.

FTSE 250 - Risers

Ocado Group (OCDO) 259.30p 6.93%
Evraz (EVR) 62.05p 5.98%
Zoopla Property Group (WI) (ZPLA) 209.80p 5.27%
Ophir Energy (OPHR) 84.55p 4.51%
Vedanta Resources (VED) 215.00p 4.47%
Man Group (EMG) 156.90p 4.18%
Cairn Energy (CNE) 133.70p 3.97%
Tullow Oil (TLW) 131.00p 3.80%
Investec (INVP) 430.00p 3.69%
IP Group (IPO) 186.50p 3.61%