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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

London open: Stocks steady; Tesco rallies on banking arm sale

(Sharecast News) - London stocks were steady in early trade on Friday, but Tesco shot higher after agreeing to sell its retail banking arm to Barclays. At 0825 GMT, the FTSE 100 was flat at 7,597.47.

Richard Hunter, head of markets at Interactive Investor, said that that overall, "UK markets remain in the doldrums for the time being given a lack of support from global investors despite the increasingly yawning gap on the main indices and their foreign counterparts on valuation grounds".

"In the year to date, the FTSE 100 has fallen by 1.7% and the FTSE 250 by 2.9%, in sharp contrast to the bouts of optimism being enjoyed in many of the other major global areas."

In corporate news, supermarket giant Tesco was the standout gainer on the FTSE 100 after agreeing to sell its retail banking business to Barclays for £600m.

The duo also unveiled a 10-year partnership to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, as well as explore other opportunities to offer financial services to Tesco customers.

Tesco said it expected to rake in a further £100m after the settlement of certain regulatory capital amounts and transaction costs. Combined with the previously announced special dividend of £250m paid by Tesco Bank last August, this is expected to result in total cash received of around £1bn, the majority of which will be returned to shareholders in the form of an incremental share buyback.

BAE Systems advanced after Kazakhstan-based carrier Air Astana - in which it has a 49% stake - priced its IPO at $9.50 per share, giving it a valuation of $847m.

On the downside, Legal & General slid as Citi cut its 2023 earnings per share estimates and opened a 30-day 'negative catalyst watch' on the shares ahead of full-year results on 6 March.

Citi said it expects material EPS downgrades into results "and although this is primarily investment variance driven, this highlights the opacity of Legal & General Capital (LGC) and comes against a backdrop of L&G being the best performing UK life insurer over the past three months and what we see as limited upside capital return surprise potential".

Polymers group Victrex tumbled as it announced a "soft start" in its first quarter as a result of continued end-market weakness and tough comparatives with the prior year, with group revenues falling by over a fifth.

Bellway nudged lower as the housebuilder said half-year housing revenue fell to more than £1.25bn from £1.80bn a year earlier, in line with the board's expectations.

Market Movers

FTSE 100 (UKX) 7,597.47 0.03% FTSE 250 (MCX) 19,125.22 0.12% techMARK (TASX) 4,396.71 0.07%

FTSE 100 - Risers

Tesco (TSCO) 286.30p 2.10% Convatec Group (CTEC) 237.00p 1.02% Frasers Group (FRAS) 800.50p 1.01% Endeavour Mining (EDV) 1,303.00p 1.01% Persimmon (PSN) 1,388.50p 0.84% JD Sports Fashion (JD.) 105.25p 0.72% BAE Systems (BA.) 1,203.50p 0.71% InterContinental Hotels Group (IHG) 7,688.00p 0.71% Smurfit Kappa Group (CDI) (SKG) 3,152.00p 0.70% GSK (GSK) 1,660.80p 0.59%

FTSE 100 - Fallers

Legal & General Group (LGEN) 236.30p -2.07% Croda International (CRDA) 4,958.00p -1.27% Centrica (CNA) 131.70p -1.24% British American Tobacco (BATS) 2,457.00p -1.09% Aviva (AV.) 416.90p -0.90% NATWEST GROUP (NWG) 213.60p -0.88% Entain (ENT) 978.20p -0.85% National Grid (NG.) 1,005.50p -0.74% Unilever (ULVR) 3,995.50p -0.72% Halma (HLMA) 2,198.00p -0.68%

FTSE 250 - Risers

AJ Bell (AJB) 341.00p 5.18% Close Brothers Group (CBG) 476.60p 2.41% LondonMetric Property (LMP) 192.00p 2.29% Asia Dragon Trust (DGN) 359.00p 2.28% British Land Company (BLND) 386.00p 2.17% Virgin Money UK (VMUK) 161.00p 2.09% Computacenter (CCC) 2,982.00p 1.84% IntegraFin Holding (IHP) 285.00p 1.79% LXI Reit (LXI) 104.00p 1.76% Essentra (ESNT) 170.20p 1.55%

FTSE 250 - Fallers

Helios Towers (HTWS) 74.00p -3.96% Tullow Oil (TLW) 29.02p -3.40% Renishaw (RSW) 3,950.00p -2.47% Crest Nicholson Holdings (CRST) 213.40p -2.20% Coats Group (COA) 70.60p -1.67% Genuit Group (GEN) 412.00p -1.67% Drax Group (DRX) 443.30p -1.58% Big Yellow Group (BYG) 1,085.00p -1.18% Aston Martin Lagonda Global Holdings (AML) 170.20p -1.05% Chemring Group (CHG) 347.50p -1.00%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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