FTSE 250 movers: Ocado, Ultra and Hiscox weigh on index

The FTSE 250 crawled back towards parity by mid-afternoon on Monday after an early morning dip, but the index remained doggedly on the wrong side of the line.

Shares in Vedanta Resources led the recovery over the day, climbing on news that India will shelve export taxes on low-grade iron ore, a move that should benefit the FTSE 250 miner but could lead to further worldwide oversupply.

Announcing a populist budget, the Indian government said the export tax on low grade iron ore would be scrapped but it would impose a higher import duty on aluminium, another commodity Vedanta produces.

Vedanta restarted exports from its Goa iron ore operations last autumn, with production of around 3.5m tons forecast by the 31 March year end, on top of the 2.3m annual capped output from the neighbouring state of Karnataka.

Morrison's shares also contributed after the struggling supermarket won a wholesale contract to supply US e-retailing giant Amazon as it rolls out its online grocery service in the UK.

The Bradford-based grocer, which has its own food manufacturing division, will make hundreds of its ambient, fresh and frozen products available to Amazon Prime Now and Amazon Pantry customers in the coming months.

Analysing the deal, John Ibbotson, of industry consultants Retail Vision, said the Amazon deal had granted the grocer "an 11th hour reprieve" as its management has been "papering over the cracks for some time".

The morning's news was a blow for Ocado shareholders, who had entertained hopes that the online grocery specialist might be a takeover target for Jeff Bezos' company. Shares in Ocado led the fallers.

Challenger banks Aldermore and Shawbrook were also on the front foot, thanks to a bullish note from broker Peel Hunt and news that the Bank of England's regulatory arms will not apply a European bonus cap on smaller banks as a blanket ban on bonuses would push up pay and so be counter-productive.

Peel Hunt said the recent dips in the specialist lenders' shares opened a buying window for some "high-quality/high-return" businesses at "compelling valuations".

OneSavings Bank, which was also given a 'buy' rating along with its challenger peers, also completed the acquisition of a portfolio of UK second charge mortgages from Melbourne Mortgages.

Among those shooting the index in the foot was Ultra Electronics, which suffered after revealing results that were a damp squib due to tight defence budgets.

The company said macroeconomic factors were still threatening future government funding in the company's markets, though Investec still issued a 'buy' rating.

Insurer Hiscox also slipped after its annual results, though a 6% decline in pre-tax profit to £216m was ahead of consensus forecasts for £214m.

Income seeking shareholders were miffed after the board warned it would retain a greater proportion of earnings to fund growth opportunities.

FTSE 250 - Risers

Vedanta Resources (VED) 273.30p 7.90%
International Personal Finance (IPF) 265.10p 5.28%
Morrison (Wm) Supermarkets (MRW) 197.20p 4.95%
Aldermore Group (ALD) 201.30p 4.52%
Nostrum Oil & Gas (NOG) 258.50p 3.40%
Shawbrook Group (SHAW) 278.10p 3.31%
Entertainment One Limited (ETO) 154.80p 3.27%
Northgate (NTG) 403.60p 3.20%
Evraz (EVR) 68.20p 3.10%
Petrofac Ltd. (PFC) 905.50p 2.96%