While yesterday’s Xi-driven growth couldn’t carry over into Wednesday morning, the European markets did avoid the kind of reverse that has often followed any sizeable growth of late.
The FTSE only shed 10 or so points after the bell, keeping the UK index in the 7250, one month high ballpark. This despite cable crossing $1.42 for the first time in just over a fortnight, as the pound continues to take advantage of the dollar’s trade war jitters. It remains to be seen whether or not the latest UK manufacturing and industrial production figures, set to rise to 0.2% and fall to 0.5% respectively, will have much of an impact on the macro-focused forex markets, or whether investors’ attention will shift, however temporarily, onto the issue of US interest rates ahead of this afternoon’s inflation data.
The UK index may have actually seen a sharper decline –the DAX and CAC have both flirted with 0.4% drops – if it wasn’t for Tesco (LON:TSCO). The country’s largest supermarket shot up by nearly 4% as the session got underway, hitting £2.18 for the first time in 16 months following a stellar set of full year results.
Deftly navigating the rock of rising food prices and the hard place of an unwillingness to pass higher costs onto customers, Tesco posted an astonishing 770% surge in pre-tax profit to a better than forecast £1.3 billion (the fact that number is more than half of the pre-tax profit seen in 2013/14 shows the difficulties of the last few years).
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