After a mid-week rally for stocks, Thursday’s session saw a bucket of cold water poured over markets in Europe, Asia and the US.
The war rumbled on, new inflation figures gave a stark reminder how the cost of living is going up fast, and the European Central Bank implied that eurozone interest rates could go up sooner than previously expected.
The trading week is currently set to end on a more positive note with decent gains across parts of Europe including a 0.7% rise in the FTSE 100. However, Asia’s performance was mixed, and pre-market indicative prices suggest a muted day for US stocks.
“Topping the FTSE 100 risers was Ocado. It’s victory time again for the company after it won the latest round of its intellectual property battle with AutoStore. The International Trade Commission has ruled in favour of Ocado, meaning the focus now shifts to a UK High Court case which starts next week,” says Russ Mould, investment director at AJ Bell.
“Fighting over patent infringement has been a major distraction for Ocado and may have acted as a deterrent for new customers signing up to its logistics platform. Not helping its cause on this front have been two fires caused by its warehouse bots.
“If Ocado can finally prove it isn’t copying someone else’s set-up, and that its bots are safe, it stands a better chance of accelerating the number of new customer sign-ups – something the market has been demanding ever since the pandemic showed the importance of having a robust, efficient online grocery operation.
“Housebuilders were in vogue following an upbeat trading statement from Berkeley. Importantly, it says selling prices are better than expected and are absorbing higher build costs.
“The mid-cap FTSE 250 index fared even better than the FTSE 100 with a 0.9% rise, led by a mixture of transport, leisure and construction stocks.
“Cineworld jumped 5.6% ahead of its full-year results next week (17 March). While revenue is forecast to have more than doubled in the year, it won’t have been enough to stop the business from making a loss. In fact, Cineworld isn’t forecast to return to profit until 2023.
“2021 was another year disrupted by Covid restrictions, but the latest Spiderman film proved to be a big hit at the box office and should have given cinema operators a boost both in terms of earnings and public sentiment towards going to the big screen.
“The market will be very interested to know how Cineworld’s trading has been so far in 2022. We’ve had two years of getting used to watching films on streaming platforms – it could be hard to wean people off this habit.
“This year hasn’t seen any big blockbuster films released apart from The Batman, so one can only assume that Cineworld will provide optimistic comment mainly based on hope for titles released later this year, such as the latest in the Jurassic Park, Doctor Strange and Minions franchises, rather than celebrate ticket and popcorn sales year to date.
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