FTSE 100 ticks higher but Tesco shares plunge
Tesco trailed the FTSE 100 on Wednesday after a set of results which came in under market expectations.
But the supermarket’s plunge did little to hold back London’s blue-chip index which finished the day higher.
The FTSE 100 index was 35.73 points or 0.48% higher at 7,510.28.
Tesco, which is Britain’s biggest retailer, saw shares drop 20.2p to 215p as a 24.4% surge in group-wide half-year earnings to £933 million missed market expectations.
The company hailed a “good start to the year” after UK and Ireland like-for-like sales rose 3.8% in the first half to August 25, with a marked improvement to 4.2% over the last three months.
Russ Mould, AJ Bell investment director, said there was a risk that the company is “still too complex”.
“The Booker deal is clearly designed to drive both sales growth and margins across the group while the launch of the new Jack’s chain is designed to tackle the threat posed by the discounters head on,” he said.
“Yet both initiatives will keep management very busy at a time when competing in the UK grocery market with Morrison, Sainsbury and rival online offerings is a full-time job in itself.”
Meanwhile shares in Aston Martin hit the skids on their first day of trading on the London Stock Exchange.
The luxury carmaker, which priced its stock market flotation in £19 a share valuing the company at £4.33 billion, saw shares tumble by 90p, or 4.7%, to 1,809p.
Funding Circle, which also began its first official day of full trading Wednesday, held steady after losing more than 20% of its value in conditional trading.
Shares closed at 365p, just 1p lower than Tuesday’s close but well below the IPO price of 440p.
In the US the Dow Jones reached a new all-time high on the back of strong economic data.
The French Cac was up almost 0.5%, but the German Dax dropped 0.42%.
The pound was up 0.3% versus the euro at 1.273 and 0.13% higher against the dollar at 1.299.
Analysts said that sterling had benefited from a well-received speech by Prime Minister Theresa May at the Conservative Party Conference.
But Hamish Muress, a currency analyst at OFX, said the reaction was “not as pronounced” as recent movement observed in the pound after political developments.
“However, with the deadline for a Brexit agreement approaching and such a small government majority, volatility in the pound will almost certainly increase as negotiations continue,” he said.
The price of oil remained high, with a barrel of Brent crude trading near a four-year peak at over 85.3 US dollars.
Russia’s President Vladimir Putin on Wednesday blamed US sanctions on Iran for the rise, though his American counterpart Donald Trump has said the actions of Opec are behind the surge.
The biggest risers on the FTSE 100 were ITV up 5.9p to 162.3p, Kingfisher up 7.6p to 261.2p, Schroders up 85p to 3,065p and Paddy Power Betfair up 160p to 6,725p.
The biggest fallers on the FTSE 100 were Tesco down 20.2p to 215p, DCC down 210p to 6,910p, Ferguson down 111p to 5,972p, and Compass down 30p to 1,679p.