Tesco results drag Footsie into the red

Market report Emma Newlands

Investors checked out of Tesco despite Britain’s biggest grocer booking its first UK sales rise in seven years.

The FTSE 100 Index closed down 16.51 point to 7,348.99, with sales cheer at the supermarket being overshadowed by slumping profits linked to its 2014 accounting scandal.

The supermarket giant was the biggest faller on the London market, sinking 11.2p to 184.4p, after statutory pre-tax profits fell in the year to 25 February.

Tesco’s slide dragged rival firms lower, with Sainsbury’s slipping 7.1p to 257.9p and Morrisons dropping 4.1p to 232p.

On the currency markets, the pound pushed 0.1 per cent higher against the US dollar at $1.249, but fell short of the psychologically important $1.25 mark.

Sterling was also slightly ahead versus the euro at €1.177, as the UK currency firmed in reaction to the latest slew of employment and wages data from the Office for National Statistics.

Average earnings beat expectations, increasing by 2.3 per cent in the year to February, unchanged from the previous month.

The price of oil struggled to make headway as US crude inventory data pointed to hefty supply in the market. Brent crude fell by 0.7 per cent to $55.86 a barrel.

The biggest risers on the FTSE 100 Index included Rolls-royce, up 20p to 830.5p, Mediclinic International, up 13p to 736.5p, and Sage Group, up 11p to 650p. The biggest fallers included Rio Tinto, down 130.5p to 3,145p, Anglo American, down 47.5p to 1,171p, and BHP Billiton, down 46.5p to 1,268p. The recruiter rose on revealing that gross profit in the first quarter rose to a record £170.3 million, on strong performances in the Europe and America. One analyst said a “weak” final quarter from the retailer “served to take the shine off a first year of positive like-forlike growth since 2009/10”.