Tesco update slows FTSE

Disappointing sales figures from the UK's largest supermarket chain weighed heavy on the London market today leaving a raft of blue chip retailers in the red.

Disappointing sales figures from the UK's largest supermarket chain weighed heavy on the London market today leaving a raft of blue chip retailers in the red.

Tesco shares dropped 5% after a lacklustre trading update, dragging down sector peers as investors spurned supermarket and retail shares.

The retailer's trading troubles combined with worse than expected European economic data to leave the FTSE 100 Index 53.3 points down by close, at 6650.2.

Tesco's shares lost 22.25p to 434.5p, after the company warned of slowing consumer spending and revealed like-for-like UK sales growth of 4.7% - lower than the 5.2% pencilled in by the City.

Fellow retailer Marks & Spencer joined Tesco high up on the fallers board, off 17.5p at 670p, followed by Argos and Homebase parent Home Retail Group, down 6.75p at 454.75p, and supermarket Morrison down 3.75p at 301.25p.

Rival Sainsbury's - due to update on its own performance tomorrow - was also down, slipping 2.5p to 581p.

Telecoms stocks also faltered as mobile phone giant Vodafone fell 3.1p to 158.9p and Cable & Wireless lost 2.1p to 196.3p. Analysts said profit-taking after a strong run for both companies had sent the shares down.

Confectionery and beverages giant Cadbury Schweppes' plans to cut 7,500 jobs worldwide and close 15% of its confectionery sites failed to impress investors. The shares were down 1%, or 6p, at 700p.

Leisure group Whitbread also suffered, down 46p at 1774p despite posting higher than expected like-for-like sales growth in the first quarter.

Brokers gave the results a mixed reception, with some saying the figures would increase pressure on Whitbread management to carry on with their break-up plans.

Meanwhile broker upgrades and continued takeover excitement helped lift other firms into positive territory.

Outsourcing firm Capita led the advance, up 12.5p to 746.5p - nearly 2% - on a positive note from Citigroup over the prospects for its insurance division.

And Dulux paint maker ICI built on its 16% rise in the previous session after the firm rejected a £7.2bn (€10.6bn) approach from Dutch rival Akzo Nobel, as investors bet on a higher offer. The stock was ahead nearly 1%, or 4.5p, at 639p.

Miners were in favour amid renewed talk of sector consolidation. Antofagasta was ahead 4p at 623p, Rio Tinto up 17p at 3903p and Lonmin up 2p at 4179p.

In the second tier, a positive note from broker Cazenove gave retailer WH Smith a boost, lifting the stock 7p, to 419.75p.

But the top FTSE 250 performer was music group HMV, up nearly 3%, or 2.75p, to 118p as analysts said the stock looked cheap after seeing value plummet since the start of the year.

The biggest Footsie risers were Capita Group up 12.5p at 746.5p, Shire up 20p at 1221p, Imperial Tobacco Group up 31p at 2240p and Hammerson ahead 19p at 1503p.

The biggest Footsie fallers were Tesco down 22.25p at 434.5p, Experian off 16.5p at 604p, British Airways down 11.5p at 424.5p and Kelda Group down 25p at 950p.

More in this section

IE_180_logo
Price info

Subscribe to unlock unlimited digital access.
Cancel anytime.

Terms and conditions apply

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up