Despite a CMA slap in the face for Sainsbury’s and Asda, the FTSE managed to re-cross 7200 on the back of some decent updates elsewhere.
In an announcement that, when you give it even a second’s consideration, isn’t particularly surprising at all, the Competition and Markets Authority said that the proposed merger between Britain’s silver and bronze supermarket medallists would cause ‘a substantial lessening of competition at both a national and local level’, to such an extent that it is ‘likely to be difficult for the companies to address the concerns’ identified.
Of course, Sainsbury’s and Asda are pretty upset by the findings, with the pair issuing a statement that claims the findings ‘fundamentally misunderstand how people shop in the UK today’, pledging to ‘continue to press’ the case in the coming weeks. Regardless, there is now serious doubt over the deal, enough to send Sainsbury’s 14% lower, forcing the orange supermarket to a 10 month low of £2.50. Interestingly, Morrisons also suffered in light of the CMA’s report, falling 5% even though it arguably would have been one of the worst hit by a successful tie-up.
Ignoring this, the FTSE added half a percent, lifting it above the 7200 mark it fell below on Tuesday. A 2.5% increase from Lloyds (LON:LLOY), following the black horse’s 24% surge in full year profit, undid some of yesterday’s banking sector losses, while Glencore (LON:GLEN) led the miners higher after announcing a $2 billion share buyback.
A slight reversal from sterling also aided the UK index. The pound dipped 0.2% against the dollar and 0.3% against the euro, potentially due to the suggestion that the newly formed Independent Group could be getting an influx of Tories, something that could hasten a general election.
Outside the FTSE 100, Intu Properties suffered its latest setback on Wednesday. Already one of the worst performing UK stocks in 2018, the firm plunged another 10% as it scrapped its final dividend due to the various bankruptcies that has hit the retail sector in the last few months.
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