MARKET REPORT: Ocado wins top prize in festive food fight 1

MARKET REPORT: Ocado wins top prize in festive food fight

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Ocado was once again the big festive winner in the UK grocery market following an explosion in online shopping since the start of the pandemic.

As the FTSE 100 continued its steady start to the year, Ocado shares gained 3.2 per cent, or 49.5p, to reach 1605.5p, making it the biggest riser on the blue chip index.

The rally came after figures from research group Kantar showed Ocado was the only grocer to post higher sales this Christmas than last. 

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As the FTSE 100 continued its steady start to the year, Ocado shares gained 3.2 per cent, or 49.5p, to reach 1605.5p, making it the biggest riser on the blue chip index

As the FTSE 100 continued its steady start to the year, Ocado shares gained 3.2 per cent, or 49.5p, to reach 1605.5p, making it the biggest riser on the blue chip index

Its sales in the 12 weeks to December 26 totalled £544million – up 2.5 per cent on the same period in 2020 and a 39.9 per cent leap on Christmas 2019 before Covid struck. In a further boost, analysts at Berenberg upgraded their rating Ocado shares to ‘buy’ from ‘hold’.

Shares in Ocado’s joint venture partner Marks & Spencer were also higher – up 4.7 per cent, or 11.2p, to 249.7p – as investors bet on its continued recovery.

M&S shares have almost trebled in value since the depths of the pandemic and are now trading at their highest level since mid-2019. 

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Stock Watch – Capita

Capita shares fell 1.3 per cent after the competition watchdog waded into its plans to sell part of its business for £62million.

On Tuesday, Capita sold its Secure Solutions and Services arm – whose customers include the emergency services – to NEC Software Solutions.

But 24 hours later the Competition and Markets Authority served an ‘initial enforcement order’ preventing NEC from combining the business until it gives it the all clear – which it may not do. 

Capita shares fell 0.48p, to 37.86p.

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M&S and Kantar are due to deliver their Christmas trading update on Thursday next week.

And if the Kantar figures are anything to go by, Tesco also enjoyed a festive boost.

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Although its sales over the 12 weeks to Boxing Day were down 0.9 per cent on 2020, they were 10.1 per cent higher than in 2019. And with its major rivals not doing anything like as well, its market share rose to a four-year high of 27.9 per cent.

By contrast, Sainsbury’s sales were down 4.4 per cent over the festive period while Asda fell 3.9 per cent and Morrisons 6.5 per cent, though they were up 5.8 per cent, 3.5 per cent and 5.8 per cent respectively on a two-year basis.

Tesco shares were up 1 per cent, or 2.75p, at 296.7p, while Sainsbury’s were up 0.9 per cent, or 2.4p, at 279.8p. Morrisons and Asda are owned by private equity.

The flurry of interest in the UK grocers came as the FTSE 100 gained 0.2 per cent, or 11.72 points, to reach 7516.87 – its highest level since February 2020.

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The more domestically-focused FTSE 250 fell 0.6 per cent, or 125.47 points, to 23771.18, however.

There was some much needed relief for investors in struggling mid-cap Cineworld whose shares jumped 18.1 per cent, or 5.89p, to 38.57p.

The rise may be seen as a sign that investors are starting to regain confidence in the world’s second largest cinema chain after a dreadful couple of years.

The stock was hammered in the pandemic and the company lost nearly 40 per cent of its value in a single day just before Christmas when a Canadian court ordered it to pay £722million to Cineplex for aborting a planned takeover in 2020.

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And, despite the much-needed rise in the shares yesterday, the stock is still down more than 80 per cent since the start of 2020. 

Back in the top flight, Holiday Inn owner InterContinental Hotels Group (IHG) rose 0.7 per cent, or 34p, to 5062p after UBS analysts upgraded it to ‘buy’ from ‘neutral’.

UBS said IHG was one of its top picks for the year, along with Whitbread (up 0.7 per cent, or 22p, to 3156p) and Paddy Power and Betfair owner Flutter (up 1.8 per cent, or 200p, to 11,835p).

Also in the spotlight of brokers was London Stock Exchange Group which rose 1.7 per cent, or 120p, to 7188p after Citigroup said its shares were ‘simply too cheap’ and slapped a ‘buy’ rating on it.

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After a stellar start to the year, airlines made further gains following the relaxation of passenger testing rules. British Airways owner IAG was up 1.5 per cent, or 2.3p, at 160.82p while Easyjet gained 1.6 per cent, or 9.2p, to reach 616.6p.

Susannah Streeter, of Hargreaves Lansdown, said: ‘The relaxation of testing rules is the late-late Christmas present the travel industry had been holding out for.’

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