UPDATE 1-FTSE 100 steadies on Tesco support; Tullow Oil plunges

Reuters | Updated: 09-12-2019 16:07 IST | Created: 09-12-2019 14:53 IST
UPDATE 1-FTSE 100 steadies on Tesco support; Tullow Oil plunges
Image Credit: Twitter (@Tesco)
  • Country:
  • United Kingdom

London's FTSE 100 was little changed on Monday as a jump in Tesco partly offset losses in oil majors and Asia-exposed financials due to China's growth worries, while a 60% slump in Tullow Oil weighed on midcaps.

The blue-chip index was flat by 0843 GMT, with its exporter stocks also taking a hit from gains in sterling ahead of UK general election later this week. The FTSE 250 midcap index was down 0.2%, with Tullow Oil single-handedly accounting for the index's fall in early deals.

The oil and gas explorer was set to lose nearly half of its market value, or 1 billion pounds ($1.28 billion), as it tumbled to its lowest in nearly 19 years after scrapping dividend and announcing the CEO's exit. Rival Premier Oil also fell 9% on the FTSE 250.

Other news related moves saw Tesco top the bluechip index with a 5.1% rise after the retailer started a review of its operations in Thailand and Malaysia. Meanwhile, China's exports in November shrank for the fourth consecutive month, fanning worries over the impact of Sino-U.S. trade war on the world's second-largest economy, overshadowing Friday's strong U.S. jobs data.

"The contrasting U.S. and Chinese data should swing the trade negotiation pendulum back to neutral from the Chinese side amongst the world's trade watchers," OANDA analyst Jeffrey Halley said. Investors were also trying to size up the chances of a new round of U.S. tariffs on $156 billion worth of Chinese goods from Dec. 15.

While signs of progress in the trade negotiations lifted the FTSE 100 to its biggest one-day gain since July on Friday, the bourse still recorded its steepest weekly fall after contradictory messages from U.S. President Donald Trump earlier on. "More soothing noises on the negotiations emerged from Washington DC on Friday, but one gets the sense that this Sunday's next round of tariffs on China is no longer the line in the sand it once was perceived to be," Halley said.

On Monday, some of UK's more domestically-exposed firms outperformed as investors bet on Boris Johnson-led Conservatives to win the election this week and deliver Brexit. Lloyds and Barclays were among the biggest boosts by 0848 GMT. "Three days to polling day and the polls are looking good for Boris Johnson...although the specter of tactical voting still lingers," Raymond James analyst Chris Bailey said.

($1 = 0.7794 pounds)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback