London pre-open: Stocks seen muted; Sainsbury’s in focus

by | Jul 5, 2023

(Sharecast News) – London stocks were set for a muted open on Tuesday as investors mull the latest policy announcement from the Reserve Bank of Australia and with US markets set to be closed for Independence Day.
The FTSE 100 was called to open unchanged at 7,527.

CMC Markets analyst Michael Hewson said: “Today’s European session looks set to be a quiet one with the US off for the 4th July holiday, and little in the way of economic data ahead of tomorrow’s services PMI numbers for June which are likely to make for better reading from an economic resilience point of view.”

Earlier, the RBA announced it was keeping interest rates on hold, having surprised markets with a 25 basis points hike last month.

“The central bank statement went on to say that inflation was still too high and that more tightening may well be required,” Hewson said.

In corporate news, supermarket chain Sainsbury’s reported an 11% rise in grocery sales in the four months to June 24 and maintained annual guidance.

The company said total like-for-like sales were up 9.8% in the period, adding it had spent £60m lowering prices amid criticisms that supermarkets were fuelling inflation by widening profit margins during the cost-of-living crisis.

“Customers can see that prices at Sainsbury’s have improved and this combination of great value and some good weather in recent weeks means we have grown our food volumes and market share,” said chief executive Simon Roberts.

“Food inflation is starting to fall and we are fully committed to passing on savings to our customers.”

Sainsbury’s said it still expected underlying pre-tax profit of £640 – 700m in 2023-24, compared with £690m a year earlier.

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