LONDON, U.K. – Gains in Tesco stocks mostly powered the FTSE 100 index in London on Monday, boosting the index to offset its losses due to declines in oil majors.
The 60% dip in the Tullow Oil has weighed on mid-caps on Monday as well as the exposed financial in Asia because of the continued growth worries in China.
The blue-chip index recorded a flat around 8:43 GMT, along with the dip on its exporter stocks following the advances for sterling before the general election in the UK scheduled later in the week.
The FTSE 250 mid-cap index also recorded modest losses, going down by around 0.2%. The decline was largely caused by the decline in Tullow Oil as well.
After announcing the exit of its CEO as well as reports of its scrapping dividend, Tullow Oil was in for a decline. The oil and gas explorer was expected to lose around half of its current market value, which would be nearly $1.28 billion (1 billion pounds), which would bring Tullow Oil to its lowest market value after 19 years.
On stocks listed under the FTSE 250 index, Tullow Oil rival Premier Oil also tracked a 9% decline on Monday.
On the other hand, the losses in the market were leveled by the gains on Tesco shares following the bluechip index rising around 5.1% after it started a review for its Malaysia and Thailand operations.
Meanwhile, the export numbers of China for November significantly decrease, marking its fourth consecutive month of declines. The further downturn in Chinese exports increased worries over the effect of the ongoing US-China trade negotiations towards the second biggest economy in the world.
According to Jeffrey Halley, an analyst at OANDA, the opposite data between the US and China should power up the trade discussion back to neutral, especially from the Chinese side.
Although the FTSE 100 was mostly lifted with the signs of progress in the US-China trade discussions, allowing the index to reach its biggest gains in one day on Friday since July, FTSE 100 still recorded one of its steepest weekly decline following the contradictory statements from the US President Trump early last week.
On Monday, some of the domestically-exposed firms in the UK rallied as most market players bet on the Conservatives party to win the majority in the UK elections scheduled later in the week, which would deliver Brexit. At around 8:48 GMT, Barclays and Lloyds were among the biggest boosts based on polls.
According to Chris Bailey, Raymond James analyst, three days before the elections and the polls are largely in favor of Boris Johnson.