Wed, 2nd Oct 2013
The FTSE 100 fell to a three-month low, with prominent UK retailer Tesco being among the biggest losers on Wednesday.
Tesco lost 3.7 percent on Wednesday after announcing that it had seen flat sales last quarter in the home market. The firm has invested a billion pounds in the UK market recently and that investment has failed to boost sales for them.
While Tesco topped the list of poor performers, other companies also slipped. By the end of Wednesday just one in ten of the blue-chip companies had performed well. Investors were concerned about the recent U.S. government shutdown and general weakness in the European markets. By the end of the day, the FTSE 100 had slipped to 6,405.53, hovering around the 200 day moving average point. The index did slip lower than that during the early part of the trading session, but it recovered slightly as lunch time approached and enjoyed technical support at the 6,400 point.
Over the last few months the FTSE 100 has consistently lagged compared to European indexes. While the EuroSTOXX 50 gained almost 17 percent over the last few months, the FTSE 100 has rallied just six percent and is showing signs of slipping downwards again. The slip has, mostly, been blamed on the defensive nature of the FTSE 100, which focuses on international blue chip companies and is therefore more likely to suffer when weak international data surfaces, while remaining less sensitive to strong performances in the domestic market.