On the day of an EU summit that’ll decide the next Brexit step, the markets got off to yet another muted start this Wednesday.
Following reports that the EU will offer Theresa May an Article 50 delay of up to a year, but with the PM herself still chasing June 30th as the exit date, the pound was tentatively positive after the bell, pushing 0.2% higher against both the dollar and the euro.
That still keeps it within the same narrow trading band it has been in all week, however, the currency clearly waiting for confirmation over how long any Brexit extension will be before doing anything more drastic. This in turn helped nudge the FTSE into the red, the index ducking under 7430 as it lost a handful of points.
If sterling can pull its focus from Brussels for a moment – and it’d be forgiven if it can’t – then it has some fairly important data to digest. Both the monthly GDP and manufacturing production readings look set to be hit by Brexit anxiety; the former it expected to drop from 0.5% to 0.2%, with the latter suffering a similar slide from 0.8% to 0.2%.
Despite reporting a colossal 87% collapse in half year pre-tax profit to just £4 million, dealing with both a pre-Christmas discounting migraine and issues at its new warehouse in Atlanta, ASOS (LON:ASOS) still managed to rise nearly 4% on Wednesday. It appears investors are relieved the online retailer hasn’t altered its full year forecasts from the price-eroding revisions posted last December, with expectations of a 15% rise in reported sales and a 2% increase in its EBIT margin.
Revealing a perfectly cooked set of full year results, Tesco (LON:TSCO) bested estimates with a tasty 28.8% surge in pre-tax profit to £1.67 billion, alongside an 11.2% jump in revenue to £63.9 billion. CEO Dave Lewis went on to claim that the supermarket has met or is about to meet ‘the vast majority’ of its turnaround goals following 2014’s accounting scandal, news that helped push the brand up by 1.5%.
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