Yahoo Finance FTSE 100 Live: Ocado shares surge despite loss, grocery inflation slows
Ocado’s bigger half-year loss of £289 million today failed to prevent its shares outperforming at the top of the FTSE 100 index.
Shares in cyber security firm Darktrace also surged as it said an investigation by EY had given its financial statements the all clear.
Elsewhere, attention is on tomorrow’s UK inflation release with grocery prices still 14.9% higher according to the latest Kantar data.
FTSE 100 Live Tuesday
Ocado losses widen to £289m
Grocery price growth slows to 14.9%
Darktrace backed in EY investigation
FTSE 100 closes up 47 points
16:49 , Simon Hunt
The FTSE 100 rose 47 points to 7,454 by the end of the day’s trading session in London.
Among the biggest gainers was online grocer Ocado, which saw its shares rocket nearly 20% despite posting a near £300 million half-year loss as it came under pressure from its joint venture partner M&S.
Julie Palmer, partner at Begbies Traynor, said: “Ocado’s long been seen as a ‘jam tomorrow’ business.
“It’s got potential to be huge in online shopping with its automated centres loading up vans with goods to be taken right to customers’ front doors. The plan is that Ocado can take that behind-the-scenes technology and sell it to companies worldwide.
The trouble is, while the vans mostly deliver its groceries, the company itself hasn’t delivered. Despite the growth in online shopping in the UK, Ocado has been a serial loss-maker.
Here’s a look at the key market data at the close:
BOE paid out £25 million in bonuses last year, according to Open Democracy
15:34 , Simon Hunt
The Bank of England stood accused today of paying bonuses to its own staff at a time when it was calling for pay restraint from everyone else as part of its own faltering fight against inflation.
A total of £25 million pounds was paid out last year in staff bonuses, with some employees getting up to £22,500 in addition to their base salaries. Just under 430 people received performance awards of over £10,000 each.
Governor Andrew Bailey – who led the pay restraint calls, for fear of a wage-prices spiral making inflation more stubborn – is paid just under £500,000 a year. Average annual pay at the BOE is over £62,000, while Bailey’s deputies are paid between £348,000 and £378,000.
The figures were compiled by the OpenDemocracy website. The Standard put them to the Bank of England, which did not dispute any of the figures.
US stocks edge lower after mixed picture for bank earnings
14:47 , Simon Hunt
Stocks fell slightly in the opening minutes of trade on Wall Street as investors digested mixed fortunes from the earnings of some of the biggest US banks.
The Nasdaq Composite dropped 0.23%, to 14,212.25 at the opening bell, while the S&P 500 opened lower by 1.01 points, or 0.02%, at 4,521.78.
Here’s a look at some of the key markets data.
Mixed fortunes for US banks as lenders focused on Main Street do better than Wall Street dealmakers
13:44 , Michael Hunter
A relative lack of dealmaking showed up in the results from big-name US banks today, with lenders focused on Main Street faring better than their Wall Street counterparts.
Bank of America’s stock rose in pre-market trade after its numbers benefitted from a rise in retail customers’ loan payments. But Morgan Stanley slipped after its quarterly profit fell by almost a fifth, with the slump in merger and activity cutting off revenue from its investment bank.
The general pattern was for rising interest rates to lift income from mortgage holders and other borrowers, offsetting the drop in M&A. There could be a similar pattern for UK banks, with their second quarter earnings season looming, with attention likely to focus on the extent to which rising interest rates are lifting profits.
UK lenders have faced criticism for passing on rises from the Bank of England to borrowers straight away, while taking longer to lift rates for savers. Meanwhile, the City has also been hit by the slowdown in M&A.
BofA’s stock ticked up 0.5% into the New York opening bell, while Morgan Stanley slipped 0.3%.
Overall, futures trade pointed to a slip of 2 points for the S&P 500, taking it to 4551.25.
Midday movers: Darktrace leads FTSE 250
12:05 , Simon Hunt
Midway though the day’s trading session in London, online grocer Ocado is leading the pack on the FTSE 100, after its technology arm hit profitability despite posting gaping losses on its much bigger retail unit.
Over on the FTSE 250, shares in cybersecurity firm Darktrace are up around 20% after it rebuffed accouting concerns by a short-seller following the conclusion of an independent investigation by auditors EY. But said short-seller has urged for that report to be published in full after Darktrace failed to mention whether EY agreed that its accounts didn’t need amending.
Here’s a look at all the latest market information.
City Comment: A special case of the UK’s inflation embarrassment
11:42 , Simon Hunt
By Simon English, Finance Editor
Workplace embarrassment isn’t a phrase you normally associate with inflation.
Thoroughgoing pain in the wallet. Job-killing disaster. Poverty-inducing crisis, maybe.
For the folk who work at the Treasury and the Bank of England it is turning into an agitation bordering on a humiliation.Tomorrow we get the inflation figure for June, with the City assumption that it will be down from 8.7% in May to 8.3%-ish now.
(That doesn’t mean things are getting cheaper of course, just more expensive a bit less quickly.)
The embarrassing bit is that despite 13 successive Bank of England interest rate rises, our inflation remains an outlier among many major countries and some that we might normally scoff at.
In the US, inflation is at a two-year low of 3%. In Japan, it’s 3.2%. War-crazy Russia? 3.2%.
Perpetually screwed-up Brazil? Also 3.2%.
Now, in Venezuela it’s 1200% and in Sudan it’s 340%, but I’m guessing Jeremy Hunt isn’t going to offer those as examples of how we’re really not doing so badly.
One reason all this is so awkward is that historically, US and UK inflation rates have tended to, if not track each other, at least be roughly in line.
And the Bank started raising rates here in the autumn of 2021, well before the US Fed or indeed the European Central Bank.
So we’ve been on the only medicine the Bank seems to have for longer, with worse results.
Maybe the Bank, and the Government, could begin to suggest that fiscal intervention — government action — is needed here, rather than just another dose of monetary leeches.
Annuity revival boosts Just shares, Flutter higher
10:18 , Graeme Evans
Shares in FTSE 250-listed retirement group Just have surged 6% on the back of soaring demand for annuity products.
The rise of 4.9p to 82.1p came after half-year retail sales rose 54% to £470 million as higher interest rates have made the guarantee returns of annuities significantly more attractive to customers.
The revival, which represented the busiest six month period for the industry since the introduction of pension freedoms in 2014, was accompanied by a 154% rise in new business for Just’s other division de-risking company defined benefit schemes.
Chief executive David Richardson said: “We are exceptionally well positioned to continue benefiting from the unstoppable trends and positive developments in both our markets.”
He is “highly confident” that Just will meet its full-year ambitions, while he also backed 15% growth in underlying operating profit a year on average over the medium term.
The strong performance of Just came during a brighter session for the UK-focused FTSE 250 index, which climbed 0.6% or 112.76 points to 18,517.19.
Other risers came from the housebuilding sector after a 3% rebound for shares in Redrow and Vistry, while the momentum for Royal Mail owner IDS continued with an improvement of 6p to 254.5p.
The FTSE 100 index rose by a more modest 16.14 points to 7422.56 as the recent underperformance of the London market compared with Wall Street continued.
A solid start to the second quarter earnings season and hopes that the Federal Reserve is near the top of its rate rise cycle have maintained the strong run for US shares.
Last night, the FANG+ index of tech and mega cap stocks that include Meta Platforms and Apple rose 1.2% to a new all-time high.
The transatlantic exposure of Flutter Entertainment meant shares in the Paddy Power and Betfair business performed well in the FTSE 100 index today.
Flutter’s FanDuel brand has enjoyed huge success since US gambling laws were relaxed in 2018, giving it more than 40% of the country’s online sports betting market.
Today, Flutter rose 120p to 15,555p after JPMorgan analysts put the stock on “positive catalyst watch”.
Ocado and Darktrace shares jump, FTSE 100 posts modest gain
08:29 , Graeme Evans
Ocado shares today jumped 7% despite the retail technology company’s wider half-year loss of £289 million.
The surge of 41.2p to 622.2p reflected relief at unchanged full-year guidance and strong growth in revenues at its solutions business.
Ocado’s performance came in an otherwise lacklustre London session as the FTSE 100 index edged 6.88 points higher at 7413.30.
Other risers included the Betfair and Paddy Power business Flutter Entertainment, which lifted 85p to 15,520p after JPMorgan placed the shares on “positive catalyst watch”.
Vodafone led the fallers, dropping 0.9p to 71p in a poor session for the telecoms sector that also saw BT drop 0.9p to 122.1p.
The FTSE 250 index lifted 41.42 points to 18,445.85, with Darktrace shares up 17% or 50.9p to 344.9p after it said EY had cleared its financial statements.
Shares in retirement business Just jumped 5.7p to 82.9p as it reported that sales more than doubled to £1.9 billion in the first half of the year.
FTSE up slightly as market opens
08:28 , Simon Hunt
A few minutes into the day’s trading session in London, the FTSE 100 has edged up slightly.
Here’a a look at your key market data:
Food prices are still soaring, but rate of inflation is cooling into CPI figures this week
08:14 , Michael Hunter
Discounting at supermarkets is helping to cool food price inflation, but the rate of overall rises is still high, according to a closely watched industry tracker.
Kantar, the market research group, found that grocery price inflation was 14.9% in the four weeks to July 9, down 1.6 percentage points in the steepest fall since it peaked in March at 17.5%. It was the fourth consecutive monthly fall.
Kantar said overall take-home grocery sales were up 10.4% year-on-year in the same period.
The numbers are out the day before the official Consumer Price Index reading for the UK for June is published, which will reveal the impact of the Bank of England’s fight against inflation. It is also expected to fall, to 8.2% from 8.7% a month ago, leaving UK price rises stubbornly high and significantly above the BOE’s official target of 2%.
Fraser McKevitt, head of retail and consumer insight at Kantar, said that the overall rate of grocery inflation remained “incredibly high”, but added: “Grocery price inflation has now been falling for four months in a row. That will be good news for many households.
“The change comes as spending on promotions has gone up for the first time in two years, now accounting for just over a quarter of the total market at 25.2%. One of the biggest shifts we’ve seen in this area is retailers ramping up loyalty card deals like Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices. This could signal a change in focus by the grocers who had been concentrating their efforts on everyday low pricing, particularly by offering more value own-label lines.”
Ocado losses widen to £289 million
07:28 , Simon Hunt
Losses at Ocado widened to £289 million for the first six months of the year as the online supermarket vowed to continue with its “focus on driving cost efficiencies and cash flow improvement.”
Ocado said the losses, which were up by almost £80 million on last year, relate in part to “exceptional costs” of £77 million, which include the costs relating to the closure of its Hatfield distribution centre earlier in the year.
Retail sales grew 5% over the period to £1.2 billion, while sales of its logistics technology got a near-60% boost to just shy of £200 million.
US shares continue progress, FTSE 100 seen lower
07:17 , Graeme Evans
US markets shrugged off yesterday’s poor China GDP figures to post another strong session, with the Nasdaq Composite up 0.9% at a 15-month high.
A solid start to the second quarter earnings season and hopes that the Federal Reserve is near the top of its rate rise cycle benefited the mood as the S&P 500 index advanced 0.4% and the Dow Jones Industrial Average by 0.2%.
The FANG+ index of tech and mega cap stocks that include Meta Platforms and Apple posted the best performance by rising 1.2% to reach a new all-time high.
In contrast, the FTSE 100 index fell 28 points and other European markets also finished lower after China’s second quarter GDP reading of 6.3% came in short of expectations to fuel fears over the global economy.
Deutsche Bank said it had lowered its view on the country’s growth for 2023 from 6% to 5.3%, and for 2024 from 6.1% to 5%, noting evidence of lacklustre domestic consumption demand and a deterioration in the property sector. They expect additional monetary easing to come through in the second half of the year.
The Hang Seng in Hong Kong was closed yesterday but caught up with developments by falling 2%, while other Asia indices were mixed today. IG Index expects the FTSE 100 index to open slightly lower.
Darktrace shrugs off short-seller report after EY investigation clears its financial statements
07:15 , Simon Hunt
Cybersecurity business Darktrace has batted away concerns over the accuracy of its reporting after an external investigation by EY has not prompted it to alter any of its published accounts.
“Neither Management, nor the Board consider EY's report to have any impact on Darktrace's previously filed public company financial statements nor to change their belief that those financial statements fairly represent Darktrace's financial position and results,” the firm said.
However, the report, which Darktrace has not published or given a summary of, did identify “a number of areas already known to Darktrace where systems, processes or controls could be improved” including “a small number of errors and inconsistencies.”
Morning refresh: What you need to know to start the day
06:47 , Simon Hunt
Good morning from the Evening Standard City Desk.
Tomorrow, we’ll get the full picture of just how stubborn inflation in the UK has become. But we’ll get an early indication of this later this morning with the release of Kantar grocery inflation figures at 8am.
Data released in previous months has shown food inflation running significantly higher than the average UK inflation rate, intensifying cost-of-living pressures for those on lower incomes. However, some supermarkets have already talked about cutting prices on a range of products.
Here’s a summary of our top stories from yesterday:
There were renewed fears of a global economic slowdown after China GDP growth figures came in behind expectations and youth unemployment reached a record high.
The UK’s financial regulator faces a probe into its effectiveness by the National Audit Office who cite the pressures of its increased responsibilities amid technological change.
Sales slumped at sofa maker DFS after it complained of worse-than-expected trading conditions.
Also this morning, we’re expecting trading updates from online supermarket Ocado, mining giant Rio Tinto and fintech Wise. Later in the day, we’ll get updates from some major US banks.
