THURSDAY MARKET CLOSE: Europe pick-up gives markets a ride

RARE economic good news from the Continent helped the FTSE 100 get into positive territory despite the drag from yet another Tesco disappointment.

Tesco spooked investors by declining to give guidance on full-year results. Picture: Phil Wilkinson

The retail giant spooked investors by declining to give guidance on full-year results due to the current turmoil surrounding its recent profits over-statement.

At the end of another volatile session, the FTSE 100 Index closed 19.42 points to 6,419.15 after the latest eurozone manufacturing data hit a two-month high.

James Abbott, trader at Accendo Markets, said of Tesco: “A record 92 per cent decline in pre-tax profits in the first half of the year and a fall in organic British sales described as the worst performance in 40 years does not sit well with traders across the City.”

Tesco shares were the biggest faller in the top flight, sliding more than 6 per cent or 12p to 171p, while Sainsbury’s dropped 4.4p to 237.2p and Morrisons declined 4.8p to 153.1p in the latest sell-off for the sector.

The difficulties in the supermarket sector also impacted on Unilever, which saw shares 4 per cent or 94p to 2,440p after saying that its sales growth had slowed.

British Airways owner IAG was once again on top of the risers’ board, up more than 3 per cent at 384p, helped by further favourable broker comment.

Outside the top flight, Shares in estate agent Foxtons tumbled almost 20 per cent or 40.3p to 165p after it said property sales commissions were 7.8 per cent lower in the most recent quarter due to a sharp slowdown in the London property market.

The profits warning leaves the stock well below the 230p price seen at the time of its flotation in September last year.