London stocks were set for another win on Wednesday, as markets tracked Wall Street higher and investors applauded earnings from Vodafone, while Ocado surged on a broker upgrade.
The FTSE 100 index UKX, +0.77% rose 0.9% to 7,602.41, which would mark a second-straight session of gains. The pound GBPUSD, +0.40%, meanwhile, continued to gain, up 1.2% so far this week, as Thursday’s Bank of England meeting looms.
Another rally for U.S. stocks helped lift sentiment across the Atlantic. “While we’re still some way off reclaiming all the territory lost at the start of the year, the fact that equity markets have stabilized shows that investors still have an appetite for risk, and they are now sifting through the wreckage to see if there are any bargains to be had,” said Russ Mould, investment director at AJ Bell, in a note.
The biggest gainer in London was Ocado OCDO, +7.51%, which surged more than 7% after a double upgrade to outperform by Credit Suisse, which reportedly said new new and low-cost technology from the online delivery company could deepen ties with existing clients.
Vodafone VOD, -1.37% VOD, +2.42% was another outpeformer, with shares up 3% after the telecoms giant said third-quarter performance was in line with expectations and that it is on track to meet fiscal 2022 guidance.
ING analyst Jan Frederik Slijkerman noted positives in the results, such as third-quarter organic revenue growth of 2.7% on an annual basis, a number that includes growth in the key German market of 1.1%, and relatively modest declines in Spain.
“There has been some other news flow as well, with activist investor Cevian taking a stake in the group and asking for better performance. Also, the company has been linked to M&A in Italy, Spain and the UK,” said Sliijkerman, who noted Vodafone has plenty of competition and a weak broadband position.
“It would be good if Vodafone repairs its market position in these countries (possibly ending up with a stake in merged company) or would exit,” he said.
Banks with a heavy weighting in the index were also in the lead, with shares of HSBC HSBC, +3.68% HSBA, +0.94% up another 1.8%. Other gains were seen among miners and spirits makers, with shares of Diageo DEO, +1.10% DGE, +1.98% up nearly 3% and Glencore GLEN, +1.62% gaining more than 2%, with Rio Tinto RIO, +0.50% RIO, +3.92% and Anglo American AAL, +0.53% also in the black.
But bucking that trend was Antofagasta ANTO, -4.59%, the only decliner on the index, and down 3%.