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Summary
- The FTSE 100 soared 77.70 points or 1.39 per cent to settle at 5,654.97 on Monday.
- Shares of Hatfield-headquartered online supermarket operator Ocado contributed majorly to the gains of FTSE 100
- A surge on the Wall Street following the US Election Day also supported the FTSE rally in the second half of the trading session
UK stock markets ended in positive territory on 2 November 2020 with the benchmark FTSE 100 registering a gain of more than 1 per cent, despite the uncertainty over the second nationwide lockdown. The FTSE 100 soared 77.70 points or 1.39 per cent to settle at 5,654.97 on Monday.
It was a mixed bag session for the UK stock market on Monday. While the heavyweight shares finished with gains while the mid-cap index FTSE 250 ended in the red. Investors and market experts were expecting a sell-off before the opening following the recently imposed lockdown in the country.
FTSE 100 (past 1-week performance)
Source: Thomson Reuters
Major contributor
Shares of Ocado Group Plc (LON: OCDO), the Hatfield-headquartered online supermarket operator, led the gains at FTSE 100 after the company raised the earnings outlook for the rest of the year. Ocado share price surged as much as 8 per cent to close at GBX 2,459 from the previous day’s close of GBX 2,276. Ocado has raised its profit forecast for the year following the spurt in volumes of online orders driven by a sharp uptick in groceries.
Ocado plc stock performance
(Source: Thomson Reuters)
According to the company, the enterprise sales are in line with the third quarter trends following which the group is expected to realise an EBITDA of more than £60 million as against the previous forecast of over £40 million. Ocado Group plc has also announced the acquisition of two robotics companies -- Kindred Systems Inc. and Haddington Dynamics Inc for an approximate sum of $262 million and $25 million, respectively.
Wall Street support
A surge on Wall Street following the US Election Day also supported the FTSE rally in the second half of the trading session. The Dow Jones Industrial Average registered a 400-point gain on Monday, with Americans going for polls, defying the uncertainty sparked by the election battle between Donald Trump and Joe Biden. DJIA rose as much as 423.45 points or 1.6 per cent to conclude at 26,925.05 from a level of 26,501.60.
DJIA (1-day performance | 2 November 2020)
(Source: Thomson Reuters)
A comprehensive gain on Wall Street has seemed to have retraced the optimism in the markets, especially amid the turbulent market condition following a dull response of voters in the US presidential elections.
Uncertainty persists
As far as the UK stock markets are concerned, most of the FTSE-listed mid-cap stocks closed on a negative footing reacting to the nationwide lockdown steering the headline FTSE 250 index to close 0.20 per cent lower at 17,180.52. The FTSE 100 has already recorded the worst month in October after the coronavirus pandemic-led slump in March.
Experts have estimated a decline of 6 to 10 per cent in the gross domestic product (GDP) growth of the United Kingdom due to the imposition of countrywide lockdown. Under the new lockdown, many businesses related to the hospitality and consumer durables sectors, including the automakers, are hoping for a lower-than-expected commerce with the Christmas and year-end festivities ahead.
With the new rules set for the second lockdown, industrialists and investors are awaiting more clarity from the government on the operations and restrictions along with the Bank of England’s Monetary Policy Committee due this week on 5 November. There is a possibility that BoE may introduce a negative interest rate regime in the country for the first time owing to the subdued growth due to the aftermath of Covid-19.
