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London open: Stocks nudge up as Ocado rallies; jobs data in focus
London stocks nudged higher at the open on Tuesday, with Ocado leading the gains after a well-received trading statement, as investors eyed the release of key jobs data.
At 0835 GMT, the FTSE 100 was up 0.1% at 7,307.14, while the pound was 0.1% firmer against the dollar at 1.3268 and 0.1% lower versus the euro 1.1685.
Sterling slid on Monday after Parliament speaker John Bercow blocked another vote on Theresa May’s Brexit deal. Bercow said there would no third meaningful vote unless there are substantial changes to the deal. He cited a convention dating back to 1604 that a defeated motion could not be brought back in the same form during the course of a parliamentary session.
Oanda analyst Craig Erlam said: “While I don’t think this is a deal breaker and a workaround will be found, it does potentially push the vote back to next week, after the EU Council meeting and days before exit day. Surely no one is surprised at this going right down to the wire at this stage. What this would do is give the EU one last chance to sway Parliament and give May something (slightly) different to put to the House. It also leaves MPs with no more time for a vote, which means we’ll finally see what they really think of the deal after months of bashing it, with a long extension the only other real alternative and therefore, possibly, no Brexit at all.
“Sterling traders remain very relaxed, comforted by last week’s vote against no deal and therefore assured that the only real options on the table range from a soft(ish) Brexit and no Brexit at all.”
Away from Brexit, investors will be looking out for the release of UK labour market data, which is due at 0930 GMT.
In corporate news, Ocado was on the front after saying its sales were barely dented by the huge fire at its Andover robot-operated depot during the quarter. The online grocery specialist reported 11.2% growth in the first 13 weeks of its new financial year to 3 March and said the fire “has been a setback, but will be only a temporary one”.
Hikma Pharmaceuticals was towards the top of the leaderboard thanks to the boost from an upgrade to ‘buy’ at Citi, while Informa was lifted after an upgrade to ‘overweight’ at Morgan Stanley.
Mining giant Antofagasta rallied as it declared a bumper dividend and posted a drop in annual core earnings that was in line with analysts’ expectations.
IT infrastructure and services provider Softcat surged as it reported a 41% jump in first-half profit and revenue as customer numbers grew and the company said full-year results will be “marginally” ahead of previous expectations.
Standard Life Aberdeen rose after saying that a tribunal has ruled in its favour in respect of investment mandate dispute with Lloyds Banking Group, while TP ICAP advanced even as it posted a 14% drop in 2018 pre-tax profit.
Energy services provider Wood Group fell sharply as it said it swung to a profit in 2018 but that its deleveraging programme this year would be “more gradual than originally anticipated”.
Polypipe slid as its full-year revenue came in in line with expectations, but underlying EBITA and earnings per share were a miss.
Ferrexpo was also sharply lower after saying that a review of its donation to charity Blooming Land identified additional discrepancies, forcing it to delay its 2018 results.
Outside the FTSE 350, womenswear retailer Bonmarche saw its shares tumble 16% after warning of a worse-than-expected full-year loss – its third profit warning in six months – as trading since the beginning of March has been “significantly” weaker.
In other broker note action, Marshalls was cut to ‘hold’ at Berenberg and Shell was downgraded to ‘sector perform’ at RBC Capital Markets.
