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UK's FTSE edges lower as Sainsbury slips
August 27, 2014 / 2:46 PM / 3 years ago

UK's FTSE edges lower as Sainsbury slips

* FTSE 100 edges down by 0.1 pct

* Sainsbury and Tesco fall on weak sales data

* ASOS - on junior AIM market - rises on bid speculation

By Sudip Kar-Gupta

LONDON, Aug 27 (Reuters) - Britain’s top equity index edged lower on Wednesday, with supermarket stocks such as Sainsbury and Tesco among the worst-performers after weak sales data.

The blue-chip FTSE 100 index dipped by 0.1 percent, or 4.33 points, to 6,818.43 points going into the close of the trading day.

Sainsbury fell 2.2 percent, making it the worst-performing FTSE 100 stock in percentage terms, while Tesco retreated by 1.2 percent after data from Kantar Worldpanel showed yet more weak sales for the country’s top supermarket retailers.

Kantar Worldpanel said UK grocery market sales rose 0.8 percent in the 12 weeks to August 17 - the slowest rate of growth in a decade for a 12-week period - as the top companies face competition from low-cost rivals such as Aldi and Lidl.

“The market reports on the monthly Kantar data reveals a British grocery market that remains firmly in the doldrums,” said Shore Capital analyst Clive Black.

However, ASOS - whose shares are listed on the junior AIM market - outperformed to surge 17.2 percent higher after British newspapers’ websites reported it could be a bid target.

ASOS declined to comment on the report, and its shares remain down by nearly 60 percent since the start of 2014 despite Wednesday’s move higher, with the stock hammered this year by a profit warning and a warehouse fire in June.

“One of my clients is long on ASOS and added to it this morning. EBay is rumoured to be the bidder but it’s just talk. Who knows? The stock has been smashed of late,” said Beaufort Securities sales trader Basil Petrides.

The FTSE 100 has risen about 4.5 percent over the past 2-1/2 weeks, boosted by speculation that the European Central Bank could unveil new stimulus measures to shore up the euro zone’s struggling economy.

The index hit a peak this year at 6,894.88 points in mid-May, which marked its highest level since December 1999.

JNF Capital trader Rick Jones said any near-term moves higher could hit a barrier around the 6,840-6,850 point level, but added he expected the FTSE 100 to test record levels around the 7,000 point mark by the end of 2014.

“We expect the market to test all-time highs later this year,” he said. (Additional reporting by Francesco Canepa and Emma Thomasson; Editing by Alison Williams and Pravin Char)

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