London View
Tuesday News - What’s Down
Tesco - 2014 is drawing to a close, but the outlook is still grim for Tesco; perhaps unsurprisingly after the news that has hit it in recent months, the retail giant has slashed
its profit forecast for the financial year, now predicting that trading profit for the year ending in February 2015 ‘would not exceed $1.4 billion’, significantly lower than the original
expectations of between £1.8 - £2.2 billion. Down by 15% earlier this morning, Tesco’s stock price is currently hovering at around -10.84% and weighing on the FTSE as
a whole – the index is currently down by around 1.06%. Sainsbury’s and Morrisons are also feeling the knock-on effects from the UK’s biggest Shopping Chain – Sainsbury’s stock is currently down by
around 3.44% whilst Morrisons is down by more than 5%.
The Shanghai Composite – What a difference a day can make; Monday’s session saw the Shanghai Composite reach the 3,000 mark for the first time since 2011. By contrast, Tuesday saw
the index plunge, falling 8% from its intraday high and closing down by 5.43% this morning. The CSDC (Chinese Securities Depository and Clearing Corporation) yesterday announced that it will
henceforth be restricting the type of securities permissible for use in repo, limiting acceptable rates to AAA sold by issuers with a rating of AA and above; this move led to the rapid drop of
bonds with lower rates.
Oil Prices – Oil has continued to drop, hitting a new five year low yesterday as the issue of oversupply shows no signs of abating. As in previous weeks, oil’s fall has hit both
mining and energy stocks on the FTSE, with a range of shares in the sector declining by an average of 2%.