London open: Stocks gain as bank sector fears ease; Ocado rallies
Sharecast – At 0830 BST, the was up 0.6% at 7,516.76.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:), said: “A relief ripple is helping stocks make some gains amid hopes that the volatility, which has wracked the banking sector, has eased off.
“The purchase of large chunks of Silicon Valley Bank’s assets by First Citizens has steadied nerves but some caution is set to remain about potential repercussions. With contagion limited for now, hopes that the debacle will have less of an impact on global growth have ticked up a little. Reports that the flow of deposits from smaller lenders to larger banks in the United States has slowed also appear to have helped sentiment.
“Right now, worries about the impact of banking turmoil are taking a back seat and the Bank of England is intent on steering consumer prices lower. Governor Andrew Bailey stressed in his speech in London last night that interest rates may have to move higher if there were signs of persistent inflationary pressure. For now, policymakers don’t see a threat to financial stability in the UK, given that banks are resilient with robust capital positions.”
Investors were mulling industry data out earlier which showed that food prices continued to soar in March, pushing shop price inflation higher.
According to the BRC-NielsenIQ Shop Price Index, annual shop price inflation hit a new high of 8.9% in March, from 8.4% in February.
Within that, non-food inflation was 5.9% compared to 5.3% a month earlier, while food inflation surged to 15% from 14.5% in February. It is the highest food inflation rate on record.
Fresh food inflation also hit a new high, rising to 17% from 16.3% a month earlier, while ambient food inflation rose to 12.4% from 12%.
Helen Dickinson, chief executive of the British Retail Consortium, warned: “Shop price inflation has yet to peak. As Easter approaches, the rising cost of sugar coupled with high manufacturing costs left some customers with a sour taste, as price rises for chocolate, sweets and fizzy drinks increased in March.
“Fruit and vegetables also rose as poor harvests in Europe and North Africa worsened availability, and imports became more expensive due to the weakening pound.
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”
In equity markets, banks were higher again, with Barclays (LON:), NatWest (LON:), Standard Chartered (LON:) and Lloyds all up.
Ocado (LON:) was the standout performer on the FTSE 100 after it said that Ocado Retail – its 50:50 joint venture with Marks & Spencer – saw a jump in first-quarter revenues and that it remained on track to return to sales growth and profitability.
The online grocer said retail revenues rose 3.4% in the 13 weeks to 26 February, to £583.7m, with average orders per week ahead 3.6% year-on-year at 381,000.
BA and Iberia owner IAG flew higher after an upgrade to ‘buy’ from ‘neutral’ at Redburn.
Bellway (LON:) advanced after the housebuilder reported a fall in half-year profits against a tough economic backdrop and announced a £100m share buyback as customer demand improved in the current calendar year, helped by a seasonal uplift and a fall in mortgage rates.
Softcat surged after saying it expects the outturn for the full year to be “slightly ahead” of previous estimates following outperformance in the first half.
On the downside, United Utilities was under the cosh after it trimmed its full-year revenue outlook, while Synthomer (LON:) tanked as its full-year results fell short of expectations.
Market Movers
FTSE 100 (UKX) 7,516.76 0.60%
(MCX) 18,603.28 0.40%
techMARK (TASX) 4,554.13 0.47%
FTSE 100 – Risers
Ocado Group (OCDO) 472.90p 4.60%
Barclays (BARC) 140.40p 2.48%
Anglo American (LON:) 2,595.50p 2.23%
International Consolidated Airlines Group (LON:) SA (CDI) (IAG) 140.24p 2.19%
BP (LON:.) 506.70p 2.07%
Standard Chartered (STAN) 604.40p 2.03%
NATWEST GROUP (NWG) 264.60p 1.89%
Lloyds Banking Group (LON:) 47.07p 1.62%
Land Securities Group (LAND (LON:)) 584.80p 1.56%
Glencore (LON:) 456.25p 1.48%
FTSE 100 – Fallers
United Utilities Group (UU.) 1,012.00p -2.27%
Centrica (LON:) 101.80p -1.50%
Severn Trent (LON:) 2,780.00p -0.96%
Diageo (LON:) 3,555.00p -0.78%
Fresnillo (LON:) 716.60p -0.67%
F&C Investment Trust (FCIT) 901.00p -0.66%
SSE (LON:) 1,719.00p -0.49%
Bunzl (LON:) 3,001.00p -0.46%
Relx plc (REL) 2,574.00p -0.46%
Rentokil Initial (LON:) 571.60p -0.42%
FTSE 250 – Risers
Softcat (SCT) 1,230.00p 6.59%
Energean (ENOG) 1,245.00p 5.87%
Bridgepoint Group (Reg S) (BPT) 217.60p 4.72%
Ithaca Energy (ITH) 152.90p 3.52%
Hunting (LON:) 239.50p 3.46%
Harbour Energy (LON:) 264.60p 3.28%
Watches of Switzerland Group (WOSG) 793.00p 3.26%
Diploma (LON:) 2,796.00p 2.72%
TP Icap Group (TCAP) 184.30p 2.67%
Aston Martin Lagonda Global Holdings (AML) 222.00p 2.59%
FTSE 250 – Fallers
TUI (LON:) AG Reg Shs (DI) (TUI) 734.80p -46.87%
Synthomer (SYNT) 103.60p -16.38%
CMC Markets (CMCX) 176.00p -4.45%
ASOS (LON:) (ASC) 700.50p -3.18%
Wood Group (John) (WG.) 198.05p -2.44%
Centamin (DI) (LON:) 97.48p -1.83%
Currys (CURY) 54.70p -1.71%
Babcock International Group (LON:) 295.00p -1.54%
Barr (A.G.) (BAG) 534.00p -1.48%
Hays (LON:) (HAS) 108.00p -1.37%
