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(Alliance News) - London's FTSE 100 underperformed on Tuesday, suffering from hefty share price declines for Ocado and Airtel Africa, before falling into the red in afternoon trade after a wary start in New York.
Stocks in New York recovered from early declines and were solidly higher at the time of the London equities close, contrasting with the more cautious trade in London.
Markets remain unnerved by rampant consumer price rises and efforts by central banks to contain them. The latest US consumer price index figure is reported on Thursday. The outcome will be closely watched as the next US Federal Reserve meeting nears.
"While the quieter week provides a rest after the swings of last week, there is still no sign of any real surge in risk appetite," IG analyst Chris Beauchamp commented.
The FTSE 100 index closed down 6.40 points, or 0.1%, at 7,567.07. The mid-cap FTSE 250 index ended down just 9.83 points at 21,787.46. The AIM All-Share index ended down 3.16 points, 0.3%, at 1,082.48.
The Cboe UK 100 index ended down 0.4% at 750.63. The Cboe 250 closed down 0.4% at 19,426.79, and the Cboe Small Companies closed 0.2% lower at 15,312.89.
On the continent, the CAC 40 stock index in Paris closed 0.3% and the DAX 40 in Frankfurt ended 0.2% higher.
Sharp share price falls for online grocer Ocado and Africa-focused telecommunications firm Airtel kept the FTSE 100 at bay.
Ocado slumped 9.7% after pointing to labour shortages for containing growth, as it struggled to find workers to keep up with increased demand.
However, it hailed its new technologies as the retailer ramps up investment into its end-to-end e-commerce, fulfilment and logistics Ocado Smart Platform.
For the financial year ended November 28, Ocado generated revenue of GBP2.5 billion, up 7.2% from GBP2.33 billion in financial 2020. The figure was in line with market forecasts.
The Hatfield-based firm posted a pretax loss of GBP176.9 million, widened from a loss of GBP52.3 million. Ocado said the loss reflected increased investment in its Solutions business, particularly the increasing roll out of the Ocado Smart Platform.
"Ocado has developed a reputation for being all talk and no profit, and its latest full year results show a continuation of negative earnings at a group level," AJ Bell analyst Russ Mould commented.
Looking ahead, Ocado said capital expenditure is set to rise to around GBP800 million in 2022, driven by the worldwide roll-out of its platform. This was higher than the GBP590 million expected by analysts at Jefferies.
Airtel shed 9.2%. Citigroup Global Markets said it placed 58 million shares of Airtel Africa, a 1.5% stake, on behalf of shareholders Warburg Pincus and Morningstar Investment. The shares were sold at 140p each, raising GBP81.2 million.
Also keeping a lid on the FTSE 100 was a largely stronger pound. Sterling rose to USD1.3551 late Tuesday, from USD1.3534 at the London equities close on Monday. A stronger pound is a headwind for a constituent list stacked with international earners.
The euro weakened on Tuesday, as the single currency's post-ECB rally wanes. The euro was priced at USD1.1413, down from USD1.1438.
The ECB will take its time to assess new data before tightening its monetary policy any faster, its president said Monday, amid fierce speculation that the bank would raise rates sooner than previously expected.
"There is no need to rush to any premature conclusion at this point in time," Christine Lagarde told a European Parliament committee, with the bank under pressure from soaring inflation in the eurozone.
At the end of the latest meeting of the ECB's governing council last week Thursday, Lagarde failed to repeat a previous assessment that a rate hike was "very unlikely" in 2022.
"Lagarde made it very clear that there would be no rate hike before end of net APP purchases," analysts at Danske Bank commented.
Against the Japanese yen, the dollar was trading at JPY115.60, higher than JPY115.05 late Monday in London.
Back in London, Micro Focus International dropped 11%, the worst mid-cap performer. The enterprise software group said revenue had continued to decline in financial 2021.
The Newbury, England-based firm said revenue slipped in the year that ended October 31 to USD2.9 billion from USD3.0 billion the year before. However, Micro Focus noted the rate of decline had improved year-on-year, dropping by 5% compared to 10% in the previous year on a constant currency basis.
Joules was a notable performer on AIM, rising 14% as it reported interim results.
Last week, the stock had hit a 12-month low, falling 46% in one day, after the company warned on a reduction in annual profit by nearly 20%. The company explained that revenue over the third quarter in the Christmas period and January was lower than it had expected.
The Leicestershire, England-based country lifestyle retailer reported a pretax profit of GBP2.6 million in the six months to November 28, doubled from GBP1.3 million a year earlier. This was on revenue which grew of 35% to GBP127.9 million from GBP94.5 million a year before.
Focus was also on what Joules labelled as an "Operational Simplification" plan.
The company is eyeing simplifying its distribution, particularly in wholesale, shortening its "product design lifecycle" and evolving its supply base. The latter will ease some of the cost pressures on its supply chain.
In addition, Joules plans to work with its third-party distribution centre provider to improve productivity.
Brent oil was quoted at USD90.28 a barrel late Tuesday, down sharply from USD92.98 late Monday. Gold stood at USD1,825.73 an ounce, higher against USD1,816.81.
London-listed oil majors struggled. BP, whose shares initially climbed after strong annual results and the promise of chunkier shareholder returns, closed 2.4% lower. Shell lost 3.2%.
Stocks in New York were higher at the time of the closing bell in London, recovering from a shaky start. The Dow Jones Industrial Average was up 0.6% while the S&P 500 climbed 0.4%. The Nasdaq Composite was 0.7% higher.
The market responded positively to a series of changes set out at fellow pandemic winner Peloton. The stock was up 22% in New York.
Home fitness company Peloton reported a net loss of USD439.4 million in its financial second quarter, swinging from earnings of USD63.6 million a year before.
Co-founder John Foley is stepping down as chief executive following a decline in fortunes at the video-enabled treadmill maker. Barry McCarthy, who served as chief financial officer at Spotify as well as at Netflix, will take over the CEO position on February 9.
Foley will become Peloton's executive chair. William Lynch, who currently serves as president, will leave that role and become a non-executive director.
Peloton said it has been a "humbling time" for the company, as it announced a "meaningful reduction" in its workforce to cut annual run-rate costs by USD800 million. It said 2,800 jobs will go globally, including a 20% reduction at corporate offices.
A quiet economic calendar on Wednesday has trade data from Germany at 0700 GMT.
The UK corporate calendar has interim results from housebuilder Barratt Developments and home furnishings retailer Dunelm. Packaging company Smurfit Kappa and drugmaker GlaxoSmithKline both report annual results.
By Eric Cunha; ericcunha@alliancenews.com
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