Spreadex Market Update

FTSE falls 50 points as CMA brings Sainsbury’s/Asda merger to screeching halt



A CMA smackdown, and continued commodity crunch, left the FTSE closer to 7400 than 7500 as Thursday got underway.

The UK index fell just shy of 50 points after the bell, dragging it to its worst price in 2 weeks as its oil and mining stocks remained in a mood. Despite Brent Crude tickling $75 per barrel following a 0.5% increase, BP and Shell lost 1.1% and 0.7% respectively, both striking a 3 week low in the process. With Anglo American’s total Q1 output dropping 6%, meanwhile, the strugglingminer lost another 1.2%.

But this is burying the lead. In a move that manages to be both shocking and unsurprising, the Competition and Markets Authority brought the game-changing Sainsbury’s/Asda merger to a screeching halt on Wednesday, stating that it had no other option but to block the deal in the face of what it described as ‘a poorer shopping experience’ for all of the supermarkets’ UK shoppers.

Sainsbury’s – which has already had a tough start to 2019 due to speculation that the CMA wasn’t happy about the potential tie-up – slid more than 6% on the back of the news, a decline that could worsen as the day goes on. It also leaves the supermarket barely hovering above £2.10, and means next week’s full year results are going to make for interesting reading.

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