FTSE 100 at the close: BT, JD Sports Fashion, Ocado

By Michael Morton
27th June 2023

Related topics: JD Sports [LON:JD.], BT [LON:BT.A], Ocado [LON:OCDO], Tickmill

By Patrick Munnelly, Market Strategist, Tickmill

The FTSE has continued to trade with a lacklustre tone, hovering just above three month lows printed in Monday’s session. At the close, the index was up 7 points at 7461.46.

FTSE100 biggest movers

BT Group LON:BT.A saw a significant decline, with its shares falling 3.5% by the close, leaving the company at the bottom of the index today as UBS warned that rising interest rates could force the telecom company to cut its dividend in half. UBS analysts expressed their belief that the market has underestimated the impact of increasing interest rates and accounting changes related to BT Sport, which will affect free cash flow. The Swiss bank stated, “Without a dividend cut, BT Group will have to borrow more than £900 million per year over the next three years.” To manage the risks associated with borrowing to fund both the dividend and pension deficit payments, especially with rising debt costs, UBS assumed that the dividend would be halved from 7.7p to 3.85p. As a result, UBS downgraded its rating on BT Group from ‘neutral’ to ‘sell’ and lowered its price target from 146p to 120p.

Hot on BT’s heels is JD Sports Fashion LON:JD., with its shares down 2.7% at the close. The sportswear retailer reported a softening in its North American business during June. However, it reassured investors that inventories in its North American operations are at normal levels and stated that promotional activity would be kept at the necessary level to remain competitive.

On the positive side of the ledger Ocado Group LON:OCDO shares continue to shine, sitting at the top of the index again posting gains of 6%. Investors cheered the addition of former Ted Baker CEO, Rachel Osborne to the Non Executive board. Prior to Rachel’s stint at Ted Baker, she was the Chief Financial Officer at Debenhams, Rachel is seen as a very positive addition to the Non Executive team with expansive experience in international retail & consumer businesses.