London’s FTSE 100 retraced early losses today to close in the black, driven higher by online supermarket Ocado surging after it settled a dispute over its warehouse technology.
The capital’s premier index climbed 0.19 per cent to 7,678.60 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, fell 0.29 per cent to 19,144.98 points.
Gains on the City’s top index were initially hobbled by the UK’s largest listed lenders taking a tumble due to investors fretting over whether a bumper profit round in their upcoming earnings could spark a political backlash.
Barclays, Lloyds Bank and NatWest all update markets this week, as does Spanish owned Santander. Asia focused lender Standard Chartered is also on the docket.
Barclays, HSBC and Lloyds were hovering around the lower end of the FTSE 100 during opening exchanges, before regaining ground.
Analysts expect banks to have pocketed tens of billions of pounds in profits when they report second quarter results this week as a result of not passing on the Bank of England’s 13 successive interest rate rises on to consumers in full.
MPs on the influential treasury select committee have urged high street banks to beef up saving rates more responsively to the Bank’s rate increases.
However, research by S&P Global last week found UK banks have been the best at passing on official interest rate rises to their customers in the rich world.
Middle-class favourite and online supermarket Ocado shot up to the top of the FTSE 100 this morning, climbing over 14 per cent after it announced yesterday it had settled its three year spat with AutoStore over warehouse technology ownership.
Ocado’s share price – which had been battered after the pandemic due to Brits heading back to physical supermarkets – is now up over 20 per cent so far this year.
Its gains were supported by telecoms giant Vodafone advancing just over four per cent after it said income climbed around six per cent in its UK business in the latest quarter.
Traders are eyeing a busy week of corporate and economic announcements, spearheaded by the US Federal Reserve’s expected final interest rate rise on Wednesday. The central bank is tipped to lift borrowing costs 25 basis points to a range of 5.25 per cent and 5.5 per cent.
That rise is likely to be repeated by the European Central Bank the following day, which would send eurozone borrowing costs to 3.75 per cent.
Pound sterling weakened 0.2 per cent against the US dollar, extending its torrid time last week that saw it weaken about 1.5 per cent against the greenback due to easing peak interest rate bets in the UK after softer than feared inflation print.