FTSE 100 watch: Trade optimism continues to support Footsie

on Feb 20, 2019
Updated: Mar 11, 2020

The FTSE 100 has inched marginally higher in today’s session, continuing to find support in hopes for a trade deal between the US and China. A hefty fall in J Sainsbury (LON:SBRY) is weighing on the index after the Competition and Markets Authority (CMA) flagged concerns over the grocer’s merger with Asda.

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FTSE 100 steady

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As of 12:28 GMT, the Footsie had added 10.58 points to stand 0.15 percent higher at 7,189.75. Sentiment has been upbeat with investors mulling over the prospects for a trade deal between Washington and Beijing. US and China officials kicked off a new round of talks yesterday, with higher-lever talks expected later in the week.

Closer to home, Prime Minister Theresa May is due to visit Brussels as she continues with her efforts to renegotiate her Brexit deal.

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Sainsbury’s has been today’s most notable blue-chip mover after the CMA pointed to ‘extensive competition concerns’ over the supermarket’s proposed deal with Walmart’s Asda.

“Sainsbury’s is the squeezed middle, losing market share to discounters and simultaneously losing out to more premium brands,” Neil Wilson, analyst at Markets.com, commented, as quoted by Reuters, adding that the worry was that the FTSE 100 grocer had “no credible plan except this merger”. Sainsbury’s shares are 15.25 percent down at 244.00p.

Lloyds Banking Group (LON:LLOY) meanwhile is trading 4.49 percent higher at 60.99p, after announcing plans to lift its dividend by five percent, and unveiling a £1.75-billion share buyback.

“Results this morning from Lloyds were a bit of a mixed bag with profits coming in lower than market expectations; however, the market focus is on a larger share buyback and an improvement in costs,” said Graham Spooner, investment research analyst at The Share Centre, as quoted by Proactive Investors.

The FTSE 100 was 0.18 percent up at 7,192.12 points as of 12:53 GMT on Wednesday, 20 February 2019.

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