Retailers led the FTSE 100 Index into negative territory today as an update from the UK’s biggest grocer failed to inspire investors.
Strong Christmas sales from Tesco were clouded by figures showing a slowdown in international growth, making the stock one of the session’s highest fallers.
A series of other retailers joined Tesco in the red, contributing to the Footsie weakening 25.2 points to 5715 by mid-morning. It came as investors in London reacted to heavy falls by the Nikkei index in Tokyo last night.
News that Tesco achieved like-for-like sales growth of 5.7% over Christmas and the New Year was not enough to impress traders. The stock lost 5.5p to 312.5p as it also reported international sales growth had slowed from 23% to 16.1%.
Tesco was beaten to the top of the Footsie fallers board by rival Morrisons, which recently showed the early signs of recovery in its festive trading statement.
Clothing chain Next retreated 2%, down 33p to 1651p, as Deutsche Bank cut its rating on the stock to “hold” from “buy”.
Oil and gas explorer Cairn Energy was in the red despite indicating that more oil may be in place at its key Indian fields than previously thought. Shares slipped 10p to 1963p as the group added it was assessing the impact of recent hurricanes on its project cost and schedule estimates.
Outside the top flight, clothing retailer Blacks Leisure fell even though it managed to restore like-for-like sales to positive territory over the festive period. The stock slipped 8.75p to 488.25p.
Set-top box maker Pace Micro lost 4p to 57p as it reported half-year losses of £8.9m (€13m) and warned short-term component shortages “may impact on immediate expectations”.
On a brighter note, JD Sports owner John David Group jumped 12p to 260p after forecasting profits ahead of expectations.