Pages

Welcome, 77 artists, 40 different points of Attica welcomes you by singing Erotokritos an epic romance written at 1713 by Vitsentzos Kornaros

Tuesday, June 11, 2013

FTSE falls again but Ocado continues its surge

Bears hit hard as online grocer rises on growing hopes for link up with Morrisons

Investors who had been betting against online grocer Ocado are feeling the pinch.

Its recent announcement of a tie-up with Morrisons dashed hopes of a possible bid, but the deal has been increasingly well received as the days wear on, despite the possible conflict with Ocado's existing contracts with Waitrose.

That has put bears of the stock in a difficult position, and seems to have led to many deciding to cash in their losses. According to estimates, around 7.8% of Ocado's shares are currently shorted, down 25% in the last month.

That squeeze on the bears helped the company's shares jump 13% on Monday, and they are currently another 5.5% - up 17.2p to 329.2p. The rises have also prompted renewed takeover speculation, with the tale of possible interest by Marks & Spencer in some kind of deal reappearing. That seems to be based solely on the fact that former M&S boss Sir Stuart Rose is now chairman of Ocado.

Overall markets are in downbeat mood again. Ahead of a key German court hearing on the European bailout funds, investors have decided to err on the side of caution. Worries about Greece in the wake of its failed privatisation attempts on Monday have re-emerged, while Japan's decision to keep its policy unchanged prompted concerns about central banks possible turning off the money taps. The violence in Turkey is not helping matters.

Miners are down on concerns about global economic growth, particularly in China. Evraz, due to be ejected from the FTSE 100 when this week's reshuffle is announced, has fallen 4p to 120.6p. Polymetal, also expected to be demoted to the FTSE 250, is down 20p at 624p.

Fresnillo has fallen 31p to £10.87 after Citigroup cut its target price from £11.20 to £10.45 with a sell rating, despite a recent site visit showing "impressive progress". The bank said:

Management is delivering on goals, transparent and shareholder focused. We have maintained for some time that Fresnillo is best-in-class among UK precious metals miners, but our bearish view on silver and our concerns about its limited free float causing excessively high valuations means we rate Fresnillo as sell.

So the FTSE 100 is down 45.17 points at 6355.28.

But Arm is up 9.5p at 878.5p following the latest launches from key customer Apple.


guardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

    

READ THE ORIGINAL POST AT www.guardian.co.uk