The Market Report: Bloody nose for shortsellers as Ocado rockets

The short-sellers won't be happy, but there is no stopping Ocado at the moment. One of the most divisive stocks in the Square Mile, the online grocer continued its fantastic start to the year yesterday as yet more short covering helped it up to its highest share price for four months.

The group closed at the top of the mid-tier index last night after rocketing up a huge 11.05p, or 12.69 per cent, to 98.15p – a level it has not seen since last October. It means that, having fallen to an all-time low in December, Ocado has added more than 80 per cent in 2012 already.

Traders were putting much of this move down to a bear squeeze, saying that short-sellers were being forced to cover their positions. According to the latest figures from Data Explorers, 12 per cent of Ocado stock is out on loan, making it one of the most heavily shorted stocks on the FTSE 250.

Still, there are some true believers. Numis Securities – which recently became one of Ocado's joint brokers – came out to bat for the group by reiterating its "buy" rating in the wake of its full-year results on Tuesday. Saying the figures showed "a credible performance considering the disruption within the distribution centre", Numis' Andrew Wade added that Ocado was "now well set to be one of the winners" in the battle for online grocery shopping.

The analysts at Oriel Securities, however, warned that anyone expecting the group's sales growth to increase significantly was "grossly optimistic". Keeping their "sell" advice, they also attacked vague speculation it could be a target for Morrisons (up 0.1p to 286.1p) as "fanciful", while adding that the "shares' brilliant but unjustified run is a great opportunity to build short positions".

Overall, encouraging factory data from China overnight, followed by figures showing a surprise return to growth for the UK manufacturing sector, got the session off to a good start. Positive data from the US later in the day only pushed the FTSE 100 up further, meaning that by the bell it was 109.11 points higher at 5,790.72 – nearly a six-month high.

A rally amongst the miners played its part in the move, with Xstrata jumping up 45p to 1,119.5p. The Swiss digger's production update earlier in the week was largely welcomed, and yesterday UBS analyst Myles Allsop reiterated his "buy" rating, saying the group still seemed cheap.

After announcing the details of its management reshuffle, Lloyds jumped up 1.58p to 32.2p, rising for the first time in four days. The rest of the sector were also ahead as sentiment appeared to be improving over Greece's debt talks despite there still being no conclusion, as Royal Bank of Scotland and Barclays were bumped up 1.12p to 27.74p and 11.55p to 224.1p.

A bullish note from Bank of America Merrill Lynch was the catalyst for Rolls-Royce to set a new all-time high. The engineering giant flew up 35p to 770.75p after the heavyweight broker's analysts said they believed the group could reach 855p, praising its "structural long-term advantages over its peers".

Traders were blaming profit taking for Arm Holdings being one of the six blue-chip stocks to fall. Amid concerns over its valuation, the chip designer was knocked back 17p to 592.5p, despite a number of brokers raising their price targets following its forecast-beating fourth-quarter results earlier in the week.

Down on the FTSE 250, Aquarius Platinum was unable to bring its recent slide to a halt, slipping a further 3.3p to 166.9p. The miner – which on Tuesday admitted its production over the second-quarter had dropped 17 per cent year-on-year – has now lost nearly 13 per cent in just three sessions.

The decision by the European Commission to block the merger between Deutsche Börse and NYSE Euronext sparked optimistic buying of London Stock Exchange. It was lifted 47p to 917p amid hopes it could be involved in future consolidation among the global bourses, although dealers were not getting excited over the well-worn idea.

Elsewhere, bid talk was being revived around Soco International. Its shares spurted up 8.5p to 300.2p after Brewin Dolphin predicted that the explorer would "either divest its Vietnamese assets, be taken over or... return significant cash to shareholders."

After its share price has dropped more than 80 per cent in under 11 months, Aurelian Oil & Gas announced it was putting itself up for sale. Complaining that it was undervalued, the AIM-listed explorer revealed it was looking at a number of options, including a sale or a merger.

Yet, despite rumours last November claiming it had rebuffed an approach worth 25p-a-share, Aurelian dropped 0.25p to 16.25p, with City voices saying there was little confidence the group – which has been hit by a wave of bad news from its Polish operations – would receive a bid priced at a significant premium.

PROMOTED VIDEO
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
News
Lizards, such as Iguanas (pictured), have a unique pattern of tissue growth
science
Extras
indybest
News
Anna Nicole Smith died of an accidental overdose in 2007
people
Life and Style
food + drink
Arts and Entertainment
'The Great British Bake Off' showcases food at its most sumptuous
tvReview: Bread-making skills of the Bake Off hopefuls put to the test
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Test Lead (C#, Java, HTML, SQL) Kingston Finance

£40000 - £55000 per annum: Harrington Starr: A Global Financial Service Organi...

Access/Teradata Developer, Banking, Bristol £400pd

£375 - £400 per day: Orgtel: Access / Teradata Developer - Banking - Bristol -...

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home