FTSE 100 at the close: Aviva, Ocado, Persimmon

By Michael Morton
24th May 2023

Related topics: Marks and Spencer [LON:MKS], Ocado [LON:OCDO], Aviva [LON:AV.], Persimmon [LON:PSN], Prudential [LON:PRU], Tickmill

By Patrick Munnelly, Market Analyst, Tickmill

The FTSE was well in to the red at the close as The Bank of England (BoE) faces increasing pressure to raise interest rates following the release of recent inflation figures. On Wednesday, it was revealed that the UK’s inflation rate had dropped by a smaller margin than anticipated in the previous month. At the same time, a closely monitored indicator of core price increases soared to its highest level in 31 years. These developments have raised concerns about inflationary pressures in the UK economy. With inflation not falling as much as expected and core prices experiencing a significant surge, there is a growing call for the BoE to take action by raising interest rates.

The index closed the session down 135 points at 7627.10.

FTSE 100 biggest movers

Aviva LON:AV., the British insurance heavyweight, faced a setback today as its shares experienced a 5%+ decline, placing the stock among the top percentage losers in the FTSE 100 Index. If the losses persist, it would mark Aviva’s worst day since March 30. The decline was primarily attributed to a slowdown in net flows to its wealth business, Aviva Investors, which fell by 15% compared to the previous year. Aviva attributed this decline to market volatility affecting investment activity. Prudential LON:PRU also took a big hit in sympathy with shares shedding over 6% on the session. The housebuilding sector has taken a hit given the potential for further rate rises which neutralised better than expected housing data before the inflation news hit the wires, Persimmon LON:PSON led the sector lower down 5%+ on the session.

On the positive side of the ledger Ocado LON:OCDO has had a reversal of fortunes, up over 4.5%+ on the day, driven by news that Marks and Spencer LON:MKS (M&S) is reinforcing its commitment to its joint venture with Ocado and is even considering the possibility of eventually assuming full ownership of the business. In 2019, M&S entered into a partnership with Ocado, leveraging the latter’s delivery infrastructure to provide grocery delivery services to M&S customers. This collaboration allowed M&S to enhance its online presence and reach a wider customer base. The company is exploring the option of eventually acquiring complete control over the business, indicating its long-term strategic vision for the collaboration. By deepening its ties with Ocado, M&S aims to further solidify its position in the online grocery market and capitalise on the growing demand for convenient home delivery services. This strategic move reflects M&S’s proactive approach to adapting to evolving consumer preferences and leveraging technological advancements to expand its market reach.