By Patrick Munnelly, Market Strategist, Tickmill
The FTSE 100 is once again hugging the flatline although the blue chip index is well off the worst levels of the day. At the close, the index was up 28 points at 7628.10.
FTSE 100 biggest movers
The flip from red to green has been driven by a turnaround in UK online grocer Ocado Group LON:OCDO, up over 4% on the day after it narrowly escaped being removed from the FTSE 100 index during the recent reshuffle. But its position remains precarious due to ongoing concerns about its business model, according to Investment Week. Ocado made its debut on the London Stock Exchange in July 2010, experiencing a tumultuous initial public offering (IPO) process.
Initially aiming for a market valuation exceeding £1 billion and a share price target of 200-275p. The company revised its target to 180-200p on the eve of the IPO. Ultimately, it only achieved the lower end of the revised target, floating at 180p per share.
At launch, the company’s market capitalization stood at £937 million, although some analysts argued its true value was significantly lower, estimating it at around £500 million. Ocado Group comprises various entities, with the most recognizable being Ocado Retail, the online grocery arm. Additionally, it includes ocado.com and Ocado Zoom among its operations.
Abrdn LON:ABDN once again sits at the top of the table as investors continue to cheer the buyback program announced yesterday, adding a further 4% to yesterday’s gains.
On the negative side of the ledger Flutter Entertainment LON:FLTR sits at the bottom of the table down 1.5% on the session closely followed by Vodafone LON:VOD losing just over 1.2% on the day amidst lingering concerns regarding anti competition investigations for its German business after it was claimed that Vodafone had impeded a competitor 1&1 with respect to radio mast use.
Improving output for UK construction
On the fundamental front May’s construction PMI data indicated a slight improvement in overall output in the UK, driven by faster growth in commercial building and civil engineering sectors. However, the report highlighted that house building remained in a depressed state.
The seasonally adjusted S&P Global/CIPS UK Construction PMI, which tracks month-on-month changes in industry activity, recorded a reading of 51.6 in May, up from 51.1 in April. This marked the fourth consecutive month above the neutral 50.0 threshold.
The report emphasised that house building experienced the sharpest decline in activity, reaching a three-year low. Concerns about the impact of higher interest rates and subdued market conditions continued to weigh on the housing sector, hampering its growth.
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