LONDON MARKET MIDDAY: Ocado Helps FTSE 100 Overcome Ferguson Drag

LONDON (Alliance News) - The FTSE 100 gained on Tuesday by midday despite a significant drag from Ferguson, with solid gains for Ocado and Persimmon helping to boost the index. London stocks were helped on Tuesday by a return of risk appetite among investors. "Concerns over the slide in the US economy are for the moment dampened by a prospect of a resolution in the Sino-US trade dispute and the end of the Mueller investigation into Russian involvement in the 2016 US election," said City Index analyst Fiona Cincotta."The index is also being propped up by an uptick in Asian markets and a slight recovery in US 10-year Treasury yields which bounced back after last week's Federal Reserve-induced decline."The FTSE 100 index was up 11.57 points, or 0.2%, at 7,189.15 on Tuesday at midday. The FTSE 250 was up 108.76 points, or 0.6%, at 18,908.32, while the AIM All-Share index was up 0.4% at 902.78.The Cboe UK 100 index was flat at 12,195.75. The Cboe UK 250 was up 0.5% at 16,954.10, and the Cboe UK Small Companies flat at 11,140.42.The pound was quoted at USD1.3232 at midday, up from USD1.3168 at the equities market close on Monday.UK Prime Minister Theresa May's Brexit strategy is in disarray after the Commons dramatically voted late Monday to wrest control of the process from the hands of ministers.The successful amendment was tabled by Tory former minister Oliver Letwin with cross-party backing, including from ex-attorney general Dominic Grieve and Labour's Hilary Benn.They were among 30 Conservative members of Parliament to defy the whips and support the cross-party amendment which was passed by 392 to 302.The result means MPs can potentially dictate business of the Commons - normally controlled by the government - for days to come, potentially paving the way for a "softer" deal that keeps Britain closer to the EU.Government ministers will consider their response at the weekly meeting of the Cabinet in Downing Street on Tuesday.The vote came after the prime minister acknowledged that she still did not have sufficient support to bring back her deal to the Commons for a third "meaningful vote". She said she would continue her efforts to build support for the deal - defeated by 230 votes in January and 149 votes in March - and stage a vote before the end of the week."While the continued uncertainty is clearly not a positive for the pound, the eventual outcome is looking increasingly favourable for the currency," said David Cheetham, chief market analyst at XTB."There will no doubt be substantial intra-day volatility driven by the latest headlines on this front, but unless the prospect of no-deal looks anything more than remotely possible, then the path of least resistance for the pound remains higher," he added.In mainland Europe at midday, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.7% and 0.2% respectively.Stocks are pointed to a higher start in the US, with the Dow Jones called up 0.5%, the S&P 500 likewise up 0.5% and the Nasdaq Composite up 0.4%.Apple shares rose 1.2% in New York after-hours trading, after unveiling a new TV streaming platform as well as a credit card, gaming portal and enhanced news app.However, Martin Garner, senior vice president at industry analyst firm CCS Insight, said this approach may not appeal to everyone."With no pricing details given, and no details of its financial commitment to original content, Apple has yet to convince the world that its service can line up alongside Netflix and attract significant numbers of paying consumers," he said.Garner argued that the surprise announcement of an Apple credit card was the most interesting announcement made on Monday.In London, Ocado was leading FTSE 100 gainers, up 4.7% on news of another international deal. Under an agreement announced Tuesday, Australia's second-largest retailer, Coles Group, will gain access to Ocado's smart platform technology. No financial details were provided.Coles trades from 818 supermarkets, 911 liquor stores, and 712 Coles Express petrol stations across the country, generating sales in 2018 of AUD39.4 billion, about GBP22 billion. It provides online grocery retailing in Australia through Coles Online, with more than AUD1 billion in sales on an annualised basis.The partners plan to construct two robotic customer fulfilment centres in Melbourne and Sydney, which are expected to be operational by 2023. Housebuilder Persimmon was up 2.2% after HSBC raised the stock to Buy from Hold.Consumer goods firm Reckitt Benckiser was got a ratings boost, up 1.2% after Barclays started the Air Wick air freshener maker with an Overweight rating.Dragging on the bottom of the index was plumbing supplies firm Ferguson, down 9.5% after saying it expects annual profit towards the bottom of market forecasts. The plumbing and heating products distributor reported revenue of USD10.85 billion for the six months to the end of January, up 8.2% from USD10.03 billion reported a year earlier, pushing pretax profit up by 14% to USD679 million from USD598 million.While Ferguson said it expects to generate further revenue growth in the remainder of its financial year, it revised its estimate for organic revenue growth to between 3% and 5%.Consequently, Ferguson said it expect trading profit for the full year to be towards the lower end analyst expectations."After a strong revenue performance in the first half our growth rate has moderated recently in line with conditions in our markets," said Chief Executive John Martin.AJ Bell said the update from Ferguson raises concerns over the health of the US economy. "What has really spooked investors is management's forecast of sales growth for the year of 3% to 5%. That implies a modest growth in the second half after that 6.5% increase in the first," said Russ Mould, AJ Bell investment director"The only logical conclusion here is that the US is now seeing a slackening in growth too, since America represents some 80% of group sales and 90% of profits. This also explains why Ashtead's shares are weaker today since the equipment rental specialist also generates around 90% of its profits the USA via its Sunbelt operations," he added.Ashtead shares were down 3.7% at midday.FTSE 250-listed housebuilder Crest Nicholson was up 7.0% after the firm said its forward sales position is "encouraging" and announced the hiring of Peter Truscott as its new chief executive.Truscott is currently the boss of mid-cap construction firm Galliford Try. Galliford Try shares were down 3.5% at midday. Galliford Try has appointed its Finance Director Graham Prothero as its new CEO, while Linden Homes Finance Director Andrew Duxbury has replaced Prothero.Spectris was the worst performer in the FTSE 250, down 4.4% after Goldman Sachs cut the measuring instruments maker to Sell from Neutral.Elsewhere on the Main Market, Debenhams shares were up 36% after shareholder Sports Direct International said it is mulling a takeover offer for the struggling department store.Trading at 2.1 pence a share, Debenhams has a market capitalisation of just under GBP26 million.Debenhams said any offer from Sports Direct must provide an offer price, a "clear plan" on how Debenhams' debt will be repaid and, finally, Debenhams said the offer must address how the company's immediate funding requirements will be met. Sports Direct was up 2.2%. On London's junior AIM market, Fevertree Drinks shares rose 3.1% after the tonic water maker reported strong profit and revenue growth in 2018, boosted by a hot summer last year in the UK. Revenue climbed 40% in 2018 to GBP237.4 million, lifting pretax profit by 34% to GBP75.6 million. This represents another year of strong growth for the firm, after similar progress over the past few years since listing in London in late 2014. In the UK, revenue surged 53% to GBP134.2 million, with performance in the country "exceptional" due to prolonged hot weather as well as events such as the royal wedding and the football World Cup. This positive performance continued over Christmas, Fevertree said. Looking ahead, Co-Founder & Chief Executive Tim Warrillow said trading so far in 2019 has met expectations and the firm "remains" excited about the future. Still to come in the UK corporate calendar on Tuesday are first-quarter results from cruise operator Carnival at 1400 GMT. The stock was down 2.1% in London ahead of its announcement.