FTSE 100 higher as banking fears ease, more crypto turmoil, Diageo change CEO and Ocado attracts more customers

“The FTSE 100 made a solid start on Tuesday amid hopes the banking crisis which has bedevilled the markets for much of March might be starting to ease,” says AJ Bell Investment Director Russ Mould.

“The insistence from Bank of England Governor Andrew Bailey last night that the turmoil would have no impact on efforts to fight inflation was the just the kind of messaging the market was looking for, even if Bailey is only responsible for UK banks.

“It’s all about confidence right now – and anything which reassures shareholders, creditors and depositors that their money is safe with the banks is one step further away from the carnage which claimed SVB and Credit Suisse.

“Whether a more cautious approach to lending by the industry might do some of the work for central banks is something they are all likely to be monitoring closely in the coming weeks.

“Shop price inflation figures showed the ongoing challenges in the UK, with a notable surge in food prices. This is bad news for consumer-facing firms exposed to discretionary spend as the rising cost of the weekly shop will continue to eat into disposable incomes.

“Bitcoin’s recent resurgence has hit a major bump off the back of news that crypto exchange Binance faces a potential US ban. Bold claims have been made for the cryptocurrency as a store of value in the past, but just when it starts to move higher, more volatility seems to be right around the corner.”

Diageo

“Farewell to the architect of Diageo’s success over the past 10 years. Ivan Menezes is stepping down as chief executive of the business and will be replaced by chief operating officer Debra Crew. An internal appointment theoretically lowers the chances of a radical shift in strategy.

“The market reaction, with a mere 0.5% decline in the share price, shows that investors aren’t worried about big changes to the business. Instead, this looks like as smooth a transition as an athlete passing the baton in a sprint relay.

“Menezes is the sixteenth longest serving CEO in the FTSE 100. Importantly, Crew becomes the thirteenth female boss of a FTSE 100 company, based on the CEO role or chair for investment trusts. That shows progress in bringing more equality to the boardrooms of UK-listed blue-chip companies, but many would argue a lot more needs to be done.”

Ocado

“There are two ways of looking at Ocado’s latest trading update. The negatives are that revenue is growing much slower than the rate of food inflation and the average basket size is in decline. The positives are that the Ocado/Marks & Spencer joint venture continues to grow its active customer numbers which suggests it must be doing something right.

“There have been worries that customers were trading down from the more expensive Ocado offering to cheaper options such as Tesco or Aldi. The latest trading update would imply that Ocado and Marks & Spencer can rest easy. It’s better to have a growing pool of active customers and wait for cost-of-living pressures to ease and basket sizes to improve than lose customers to rivals.”

These articles are for information purposes only and are not a personal recommendation or advice.