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Tesco Contributes to Lacklustre Day

WEDNESDAY MARKET UPDATE: The FTSE 100 edged down and Tesco shares were under pressure after the company discovered horse DNA in some of its beef products

Alanna Petroff 16 January, 2013 | 6:22PM

Shares in Tesco (TSCO) were under pressure on Wednesday after the company announced that a number of its beef products contained horse DNA. Tesco shares fell by 1.7% during trading, but then recovered and closed 0.7% below the previous day's close.

"We immediately withdrew from sale all products from the supplier in question. We are working with the authorities in Ireland and the UK, and with the supplier concerned, to urgently understand how this has happened and how to ensure it does not happen again," stated Tim Smith, Tesco's technical director, in a press release. "We will not take any products from this site until the conclusion and satisfactory resolution of an investigation."

The affected meat was also sold by other retailers, including Iceland Foods and Lidl.

Mining companies such as Glencore International (GLEN) and Xstrata (XTAalso contributed to a drag on the large-cap FTSE 100 index. The benchmark index edged down by 13 points, or 0.2%, to close at 6,104. The mid-cap FTSE 250 index dipped by 11 points, or 0.1%, to close at 12,764.

Up, Up and Away

The main gainer on the FTSE 100 was TUI Travel (TT.), which saw shares rise by 4% after the travel company announced that it was in early talks with TUI AG (TUI1) about a possible all-share merger.

"The Independent Directors of TUI Travel have recently received an approach from TUI AG  which may or may not result in a combination of the two companies," stated the company in a press release. "Discussions are at a very early stage, but are on the basis that any such combination, if effected, would be achieved not by a reverse takeover but by means of a nil premium all-share merger."

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Glencore Xstrata PLC314.95 GBX0.03
Tesco PLC297.45 GBX1.73
TUI AG12.03 EUR-0.95-
TUI Travel PLC427.90 GBX0.28-
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.