Supermarket Struggles Hamper FTSE 100
The FTSE 100 struggled on Wednesday, after the supermarket sector endured a difficult day. Tesco was the poorest performer of the day, slipping by 5.73 percent after its full-year profits declined due to legal costs relating to the fine that the chain incurred for over-stating profits back in 2014.
Rival retailer Sainsbury’s also came under pressure, shedding 1.32 percent, while Morrisons declined by 1.07 percent.
By the end of the day, the FTSE 100 lost 16.51 points; a fall of 0.22 percent, down to 7,348.99. Supermarkets were not the only companies struggling, either. The mining sector also went through a stressful day with Anglo American, BHP Billiton, Glencore and Rio Tinto all making it into the list of the day’s worst performers.
Meanwhile, in the currency markets, the pound rose by 0.05 percent against the dollar, and also gained 0.02 percent against the Euro. While these are small changes, the recent recovery of the pound could be contributing towards the difficulties for the FTSE 100, as so many of the companies listed in the index earn a significant portion of their income in foreign currency, and a weaker pound had been good for those companies, as well as for those that export a lot of goods. The recent strength of the currency could be shortlived, however, as the ongoing Article 50 negotiations are likely to lead to some short and medium term volatility for the currency as trade agreements and other terms are worked out.