Tuesday, August 9: FTSE indices were led higher on a results basis and a few bank rating changes, after mixed trading in Asia. Brent Crude capitalised on positive flows seen yesterday to trade above $45/bbl, hitting an intraday high of $45.74/bbl.
Ocado Group(+4.87%) rallied with Morrisons(+2.13%) after news flow indicated a new deal between both parties. Analysts note the deal is significantly better for Morrisons than the previous deal which was struck as the grocer was under duress, and struggling to turn around it’s fortunes. The agreement brings bilateral benefits: a more sustainable economic prospect enabling Morrisons to build out its UK online capability, whilst providing a lifeline to Ocado in grocery fulfilment activity within its domestic market, and potentially removing barriers to further collaboration in international markets.
Amec Foster Wheeler(+10.72%) stormed higher despite swinging to an interim loss, laying the blame at lower oil prices. The company which works across oil, mining, environmental, and other sectors reported a pretax loss of £431m for the six months ended June 30, compared with pretax profit of £46m in the same period last year. Revenue was pushed 6.8% higher on acquisitions as it announced an interim dividend of 7.4p, however full year guidance for 2016 remains unchanged.
Further UK data at 9.30am prompted Sterling to slide lower against major currencies. The first slice of data showed the trade deficit continued to widen with both the European Union and the rest of the world in June. According to the figures released by the ONS, UK imports from the EU reached record levels on both the month and on the quarter. Concurrently, industrial production ticked up 0.1% on the month, and 2.1% on the quarter, with the ONS citing the manufacture of transport equipment as the largest contributor to the rise. Sterling took a hit against both the euro and the dollar on the basis of the data, though the reaction was largely superficial as the data was representative of the period before the EU membership referendum.
At the close European indices were up as the FTSE 100 closed +0.62%, the Cac 40 +1.19% and the Dax 30 +2.50%.