Ocado jumps on Asda deal; FTSE 250 gains as oil slips

Ocado shares jumped 11.3% after the company struck a deal to revamp Asda’s online grocery business across the UK, helping the domestically focused FTSE 250 move toward a second straight weekly gain. The FTSE 250 climbed about 0.8% on Friday while the blue-chip FTSE 100 rose 0.3% to 10,459.94 points by 11:18 GMT, leaving it on track to finish the week largely unchanged.

The agreement covers a nationwide overhaul of Asda’s online operations using Ocado’s technology and logistics. Investors pushed up other home-focused stocks during the session as attention focused on the potential impact for UK online grocery infrastructure and retail competition.

Oil prices fell nearly 2% after reports indicated the United States and Iran had agreed to extend a ceasefire and remove restrictions on shipping through the Strait of Hormuz. The slide in crude had mixed effects on energy stocks, with Shell and BP trading in different directions as investors assessed the implications for oil demand and geopolitical risk.

Bank of England Governor Andrew Bailey said allowing inflation to stay above the 2% target could be justified given current uncertainty. He noted the Bank had effectively tightened policy by removing the prospect of rate cuts. Money market pricing indicated traders were placing odds on at least one 25-basis-point rate increase this year, with the chance of an additional hike near 30%, down from around 50% earlier in the week.

Several UK retailers fell after a major bank downgraded their ratings on concerns about weaker consumer spending and declining confidence. Shares of B&M, Currys, Dunelm and Wickes Group each dropped roughly 1.5% to 2.2%, putting pressure on the retail sector.

Despite selling in some retailers and mixed moves among energy names, gains in Ocado and shifts in expectations for geopolitical risk and monetary policy left the FTSE 250 poised for a second straight weekly advance while the FTSE 100 was set for a broadly flat weekly performance.