Wednesday, July 5: FTSE indices started and closed in the green, as house builders, mining and select financial stocks helped the FTSE 100 index +0.14% higher. House builders were buoyed by a positive update from Persimmon after it reported selling 8% more homes, with an average selling price 3.5% higher. On the whole, there wasn’t huge gyrations across markets as investors await US Fed minutes tonight.
Yesterday saw investors snatch a glimpse of current dynamics in the retail sector, courtesy of Sainsbury’s. Today, another glimpse came from the £3.7bn planned Tesco acquisition, Booker Group(+3.53%), reporting like-for-like growth of 4.2% for the first quarter ended June 16, helped by favourable weather and the late Easter. Booker, owner of Londis, Budgens, Premier convenience chains and Makro reported performance in line with expectations, as Premier continues to grow and progress has been made with both Budgens and Londis. Tesco last week asked the UK Competition & Market Authority to “fast track” its phase one review into the proposed merger of the two companies. Tesco was also up 3.96% on the news.
Ocado Group(+2.24%) was marginally higher in early trade despite announcing a fall in pretax profit for the half year attributed to investment in the opening of a distribution centre and ongoing cost inflation. Ocado’s pretax profit was down 18% to £7.7m, but the company still plans to go ahead with its fourth customer fulfilment centre in Erith, South East London, scheduled for a 2018 open. Once fully operational, Ocado expect the site to increase its potential capacity by 200,000 orders per week, supporting growth of both Ocado and Morrison’s online business. Morrisons traded 1.39% higher on the positive read-across.
Preliminary UK auto sales data indicated a new car sales drop of roughly 5% for June year-on-year and overall sales for the first six month of the year dropped by 1%, according to The Society of Motor Manufacturers and Traders. Data later in the morning indicated that the UK Services industry PMI data fell somewhat short of the forecast 54.5. The actual number for June came in at 53.4, 0.4 lower than the figure for May and indicative of lower activity in the sector overall. Both of these factors conspired to weaken sterling -0.18% to US$1.29048 as sterling sold off on the car registrations data, before recovering losses shortly after while the pound strengthened against the euro on the announcement. PMI data fell for a successive month as businesses cited political uncertainty as hindering service sector growth, though traders took the more pragmatic view that there was no evidence of underlying weakness in the sector.
Across Europe, indices were higher at the close with the FTSE 100 +0.14%, the DAX 30 +0.18% and the CAC 40 +0.16%.