Thu, 3rd Oct 2013
The FTSE 100 staged a small rally on Thursday, gaining 11.54 points after a difficult week. One of the companies contributing to the rally was the supermarket giant Tesco.
Tesco gained more than two percent on Thursday, bouncing back from a poor performance on Wednesday. The supermarket announced on Wednesday that it had experienced some difficulties abroad and that local growth was not as strong as expected, in spite of heavy investment in the domestic markets. This news of poor performance shook investor confidence and led to serious losses early in the week.
On Thursday, Citibank upgraded the chain to "neutral" from "sell", stating that it believed that there were a lot of misconceptions regarding the company and that it was worth watching at its current rating. Another strong performer was UK based oil company BP, who gained 1.1 percent after winning a reprieve in a legal battle over the oil spill that took place in the Gulf of Mexico in 2010. The reprieve saved the company billions of dollars in potential costs.
While Tesco and BP staged a recovery and the FTSE 100 grew overall, other markets were not so lucky. The FTSE 100 out-performed most of its European equivalents, which were all in negative territory because of concerns about the U.S. government shutdown and economic instability in other parts of the world.
The FTSE 100 had been underperforming compared to other indexes for most of the week, so this rally could be a sign of market correction.