FTSE steadies as Sainsbury's update leaves supermarkets mixed
Reuters
Published Mar 17, 2015 12:09
FTSE steadies as Sainsbury's update leaves supermarkets mixed
By Alistair Smout
LONDON (Reuters) - Britain's top share index held steady on Tuesday following a rebound from last week's lows, with supermarkets and commodity stocks mixed after updates from J Sainsbury (L:SBRY) and miner Antofagasta (L:ANTO).
The blue-chip FTSE 100 index (FTSE), which had its worst weekly loss in 2015 last week, was flat in percentage terms, up just 1.03 points at 6,805.11 points by 1127 GMT -- leaving it 2.5 percent below record highs of 6,974.26 points reached on March 2.
Sainsbury was one of the most heavily traded stocks on the FTSE 100, rising by 0.8 percent as investors viewed the company's latest results as less negative than feared.
The supermarket operator saw volume of three quarters of its 90 day average traded by midday after it posted a fifth straight quarter of declining underlying sales.
While it said it did not expect the trading environment to improve any time soon, it expressed confidence in its ability to outperform rivals.
"(Sainsbury) slightly beating market expectations in terms of pace of like-for-like sales decline has kept the share price above water," Lewis Sturdy, dealer at London Capital Group, said in a note.
"The worry for investors will be that the recovery process is not happening fast enough for Sainsbury's, which should be in a position to react quicker than its peers."
Tesco (L:TSCO) fell 2.6 percent and Wm Morrison (L:MRW) dropped 1.9 percent, with traders saying that competition from Sainsbury and cut-price grocers such as Aldi
The heaviest faller was copper miner Antofagasta (L:ANTO), down 3.6 percent after reporting lower earnings and slashing its dividend due to uncertainty over a lawsuit over water supply to its main mine.
"Antofagasta's numbers were a factor, and with the supply of water to the mine under threat, we could see costs rising further in the face of falling commodity prices," Zeg Choudhry, managing director of LONTRAD, said.
Fellow miner BHP Billiton (L:BLT) shares rose 1.8 percent after details of the $13 billion spin-off of its South32's mines and refineries assets.
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Rallies in beaten down oil and utility stocks helped to support the market. Tullow Oil (L:TLW) rose 4.7 percent to nearly retrace all of the previous session's fall, while British Gas owner Centrica (L:CNA) rose 2.7 percent.
Traders said there was appetite returning to the market for some of the most beaten-down shares this year.
Tullow has been the top FTSE faller this year, down more than 30 percent in 2015 as oil prices have dropped, with Centrica the third-biggest faller, down nearly 15 percent in the build-up to May's general election, where utilities could come under increased regulatory pressure.
Written By: Reuters
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