Tesco shares fall 2 despite FTSE rally as traders eye US jobs data

Tesco shares hit their lowest levels since mid-July this morning, underperforming a general rise in demand for large cap London listed shares that helped the FTSE 100 to rally 0.46% ahead of the release of US jobs data for September.

By 11.30am, the FTSE 100 had rallied 26 points, tracking similar gains in European trade that helped the DAX and CAC both to enjoy gains of  05% and 0.8% respectively.

Tesco shares hit new two and a half month low

Tesco’s shares price has continued to slump after reporting in line half year figures earlier this week. Britain’s largest supermarket has seen its shares price fall back below the 312p level today, its lowest levels since mid July and marking a slump of 8% in the last three trading sessions. Investors are waiting to see Tesco turn the corner after issuing a profit warning in January, and the strength of Sainsbury’s performance in the last two quarters remains a high area of concern for Tesco’s shareholders. This concern is being represented in their share price, with Sainsbury’s rallying 0.6% today, and indeed 2% in the last three trading days compared to Tesco’s slump.

US non-farm payrolls in focus

As with every first Friday of a new trading month, we see the traditional US labour market report where investors are mildly confident that US jobs could see a decent rise from a disappointing report in August. US non-farm payrolls is expected to grow to 113,000 jobs, with private payrolls hitting 130,000 but the US unemployment rate is also expected to nudge higher to 8.2%.

With the Fed already showing their hand in terms of open ended asset purchases of $40bn per month until the US unemployment rate falls to a subjectively comfortable level, we could continue to see a double positive or double negative for the US dollar in reaction to today’s jobs figures. A strong figure could be double positive in that it may shorten the open endedness of the Fed’s actions and increases positive sentiment around the US economy, whilst a weaker reading could do the opposite.

So all eyes towards the measure at 1.30pm.

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