Market report: Hopes growing for a turnaround at Tesco as recovery gains traction

Comments Off on Market report: Hopes growing for a turnaround at Tesco as recovery gains traction

Could this be the year for Tesco’s big turnaround?

Shares in Britain’s largest supermarket group, which is fighting off the rise of German discounters Aldi and Lidl, continued their surge today.

They were up by another 6.3p to 180.1p, taking Tesco’s improvement this year to 20.5% and making it the best-performing, non-mining stock, even under the dark cloud which has loomed over the stock market in 2016. Yesterday’s Kantar data showed Tesco’s recovery is gaining traction, even as sales fell 1.6% in the 12 weeks to January 31.

A disastrous 2014 when the group’s accounting flaws were exposed and chief executive Philip Clarke quit, led to Tesco being the second-worst performer on the FTSE 100.

Many analysts tipped Tesco for a change of fortune the following year, but those predictions quickly went out of the window as they realised the turnaround, under new boss Dave Lewis, would take much longer than expected.

Tesco’s rise came as it emerged the group has taken full control of the trendy café chain Harris + Hoole, in which it previously had a 49% stake.

The FTSE 100, which is proving to be an unpredictable beast in 2016, recovered from a late dive yesterday to put on 48.28 points to 5680.47 ahead of US Federal Reserve chairman Janet Yellen’s testimony to Congress. Investors will take a keen interest in her comments for clues about the timing of the next rise in US interest rates.

Hikma Pharmaceuticals was the biggest blue-chip casualty, diving 224p, or 11%, to 1771.8p amid concerns about its takeover of US firm Roxane Laboratories. The drugmaker said it had lowered its revenue forecasts for Roxane and was therefore cutting its cash payment by $535 million (£368.8 million), having agreed a $2.65 billion cash and shares deal in July.

Oil driller Tullow tumbled to the bottom of the FTSE 250, down 9.7p to 151.7p, as it racked up its second straight annual loss. Tullow managed to trim the deficit, but it was still $1.09 billion, crippled by the oil-price crash.

Investors hung up on TalkTalk, 0.8p cheaper at 200.6p, after broker Jefferies slashed its target price on the phone and broadband group to 150p.

Meanwhile, among the small-caps, big-data firm WANdisco, a former AIM tech darling, plummeted 53.5p, or 29%, to 136.05p after warning that revenues for 2015 will be lower than expected.

Source Article from

February 11, 2016 |
Copyright © 2019 All Rights Reserved.
WordPress Directory Theme

Classified Ads Software

We use cookies to ensure that we give you the best experience on our website.
More about our cookies
Skip to toolbar