Mon, 5th Aug 2019
The FTSE 100 slipped by 1% during early trading, joining a global market sell-off which was prompted by escalating U.S - China trade tensions.
Among the fallers were Ocado and M&S, who slipped after they announced that they were launching a joint food venture. The venture would see Ocado end its current deal with Waitrose, and has not been well received by investors. Marks and Spencer shed 2.5 percent, as did Ocado, after the news broke.
The FTSE 100 had slipped more than two percent on Friday, and continued its slide, dropping to a seven week low during early trading. The FTSE 250 also trended downwards by 0.9 percent.
Many investors are moving over to safe-haven assets, as they fear that tensions between the US and China are becoming more serious. These fears hit the FTSE 100 quite hard, as there are many companies in the index that depend on international trade and on stable currencies.
Blue chips were also hit by fears that the UK authorities were clamping down on schemes to avoid tax. Many companies have been forced to put aside substantial funds to help ensure that they can cover any bills for multinational tax avoidance schemes. In 2017-18, FTSE 100 companies set aside £5.2 billion, collectively, and in the most recent year they have set aside an additional £4.5 billion to cover any potential disputes relating to the Diverted Profits Tax, which was first introduced in 2015. The tax has affected many companies, including AstraZeneca and GlaxoSmithKline.