The FTSE 100 showed little sign of life again on Tuesday as investors awaited the Federal Reserve’s interest rate decision tomorrow.
London’s leading index was up 0.1% at the time of writing after trading negatively in early trade as investors reacted to slightly disappointing retail sales data, which showed the UK economy is still under pressure amid concerns about Rachel Reeves’ tax-raising budget.
Although the benchmark was relatively uninspiring at the index level, there were interesting movements on a single-stock basis.
British American Tobacco was the top faller, dipping 2.7%, after reporting volume-share declines and reaffirming guidance.
Chris Beauchamp, Chief Market Analyst at IG, said, “The recent surge in BAT’s shares has come unstuck, as this morning’s update acts as drag on the share price. Still, the strength in the US is encouraging, though it might provoke worries that BAT will be yet another firm tempted to swim the Atlantic in favour of a US listing. The doldrums of 2019 – 2023 seem to be firmly behind it now that it rediscovered its sales momentum in key markets.”
Tesco shares were 2% lower after market share data showed the UK’s leading supermarket losing out to peers.
“New figures from Worldpanel show that Sainsbury’s, Marks & Spencer, Ocado and Lidl all grew faster than Tesco in the 12 weeks to 30 November,” explained Dan Coatsworth, head of markets at AJ Bell.
“It feels like the battle for the Christmas pound starts earlier each year, and the grocers are pulling out all the stops to ensure they’re the ones catering for festivities.
“Tesco is the market leader by some distance, which puts it in a strong position to demand best deals from suppliers.”
Mild risk aversion was evident in cyclical sectors, such as miners, which slipped on the day. Antofagasta lost 2% as Glencore slipped 1%.
Despite a string of downbeat stories, the index flipped in favour of the bulls before midday
WPP shares added 2% following news it had won a £2bn advertising contract with the UK contract, suggesting there was still life in the old dog that hasn’t adapted well to the rise of AI.
Sage Group rose 3% after Bank of America upped its price target.
Babcock and BAE Systems rose as progress in Ukraine peace talks looked to stall. The two defence names had been under pressure as negotiations between Ukraine, the US, and Russia ramped up, but redlines for either side suggest a deal is a way off.