FTSE 250 Set for Weekly Gain as Ocado Soars After Asda Partnership
Market Overview and Key Drivers
May 29 (Reuters) - The UK's domestically focused FTSE 250 index headed for a second straight weekly gain on Friday, powered by a surge in technology firm Ocado's shares after its tie-up with Asda, and on reports that the U.S. and Iran were near a ceasefire extension.
The blue-chip FTSE 100 index rose 0.3% to 10,459.94 points by 1118 GMT, looking to end the week largely flat. The midcap FTSE 250 added 0.8%.
Ocado and Asda Partnership
• Ocado soared 11.3% after supermarket group Asda struck a deal with the technology firm to overhaul its online business across the UK.
Impact on Technology and Retail Sectors
• Shares in UK retailers B&M, Currys, Dunelm, Wickes Group dipped between 1.5% and 2.2% after Deutsche Bank downgraded their ratings, citing weaker consumer spending and confidence.
Oil Prices and Geopolitical Developments
• Oil prices slipped nearly 2% after reports that the U.S. and Iran had reached agreement to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters. Shares of oil majors Shell and BP were mixed. [O/R]
Market Sentiment and Domestic Stocks
• Hopes of a U.S.-Iran de-escalation and easing bets on UK interest rate hikes have buoyed domestic stocks over the past two weeks.
Bank of England Policy and Interest Rates
• Bank of England Governor Andrew Bailey said that allowing inflation to run above the central bank's 2% target is justified given the economic uncertainty and reiterated comments he made last week in which he said that the BoE had tightened monetary policy by taking rate cuts off the table.
Interest Rate Expectations
• Money market bets show traders are pricing in at least one 25 bps interest rate hike this year and see a near 30% chance of another move, down from 50% probability earlier this week.
Market Reactions and Analyst Commentary
(Reporting by Medha Singh in Bengaluru; Editing by Leroy Leo)
