Tesco share price chart on mobile
Tesco shares rise on optimistic prospects / Image source: Adobe

Markets in Europe fell at midday on Friday, as investors digested upcoming elections.

The FTSE 100 index was down 38.55 points, 0.5%, at 8,125.12. The FTSE 250 was down 99.98 points, 0.5%, at 20,095.97, and the AIM All-Share was down 2.93 points, 0.4%, at 777.50.

The Cboe UK 100 was down 0.5% at 808.49, the Cboe UK 250 was down 0.9% at 17516.73, and the Cboe Small Companies was down 0.2% at 16706.07.

In European equities on Friday, the CAC 40 in Paris was down 2.5%, while the DAX 40 in Frankfurt was down 1.1%.

The CAC continued to struggle on Friday. Over the past five-days, it is down 6.5%.

On Sunday, following the EU elections, President Macron called a snap election. This has created political uncertainty in the company, with the right and left divided.

The UK also remains divided politically.

Reform UK has overtaken the Conservatives in a major opinion poll, as UK Prime Minister Rishi Sunak continues his absence from the general election campaign trail to meet world leaders in Italy.

A YouGov survey commissioned by the Times newspaper had Nigel Farage’s party at 19% to the Conservatives 18% in voting intention, in a crossover moment which is the latest blow to Tory hopes of returning to government.

In early economic news, the Eurozone swung to a trade surplus annually in April, as exports shot up, Eurostat reported on Friday.

According to first estimate, the eurozone reported a trade surplus of €15.0 billion in April, compared to a deficit of €11.1 billion a year earlier.

Exports of goods to the rest of the world in April were €247.6 billion, up 14% annually. Imports from the rest of the world stood at €232.5 billion, up 1.8%.

The pound was quoted at $1.2705 at midday on Friday in London, down compared to $1.2764 at the equities close on Thursday. The euro stood at $1.0683, lower against $1.0763.

Against the yen, the dollar was trading at JP¥157.02, higher compared to JP¥156.88.

In the FTSE 100, Tesco rose 2.8% to the top of the index.

The grocer said like-for-like sales in the 13 weeks to May 25, the financial first quarter, rose 3.4% to £15.31 billion. The UK outperformed with comparable sales up 4.6% to £11.4 billion. Booker sales fell 1.3%, Central Europe sales rose 0.6% while in the Republic of Ireland sales climbed 4.4%.

Chief Executive Ken Murphy said: ‘Following another strong quarter, we’re pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead.’

Crest Nicholson and Bellway bookmarked the FTSE 250 index, with Crest up 8.6% and Bellway down 3.9%.

Crest said it has rejected a revised all-share offer from Bellway.

On Thursday, Bellway made a new takeover proposal for Crest, but said it had been rejected.

Bellway said under the terms of the bid, Crest Nicholson investors would have stood to receive 0.093 of a Bellway share for each Crest Nicholson share. It valued Crest Nicholson shares at 253.00 pence each, the company’s equity overall at around £650.0 million.

However, after evaluating the revised proposal with financial advisers, the board of Crest rejected the offer having concluded that the offer ‘significantly undervalued’ the company and its future stand alone prospects.

Elsewhere in London, Raspberry Pi jumped 17%.

The budget compute firm’s shares hit the open market for retail investors. On Tuesday, the stock was made available to institutional shareholders. Since then, the stock is up 23%.

Friday’s gains indicated that demand is also high among ordinary retail investors, after the IPO was hyped as a welcome victory for the London market.

AJ Bell’s Russ Mould commented: “Having a successful IPO also raises awareness of a stock among the investment community and Raspberry Pi has been the talk of the town after its stock market debut went off with a bang earlier this week.‘

On AIM, Bradda Head Lithium rose 18%.

The North American-focused lithium explorer provided drill hole geochemical results for its Basin project in Arizona.

Chair Ian Stalker said: ’This is a particularly exciting juncture in the company’s trajectory, as we await the updated resource which could unlock a significant royalty payment from the LRC.‘

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.8%, the S&P 500 index down 0.5%, and the Nasdaq Composite down 0.2%.

Brent oil was quoted at $82.52 a barrel at midday in London on Friday, virtually unchanged against $82.53 late Thursday.

Gold was quoted at $2,324.40 an ounce, higher against $2,307.79.

Still to come on Friday’s economic calendar, there is a US import and export price reading.

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Issue Date: 14 Jun 2024