The large-cap FTSE 100 index slipped a bit lower on Tuesday, while the mid-cap FTSE 250 index edged slightly higher. The mixed results came as investors mulled over reports that Spain is about to officially request a bailout.
"Traders have found it difficult to get a sense of direction for equity markets or the euro as contradictory comments continue to ensure that European waters remain as muddy as ever," said Alastair McCaig, a market analyst at IG. "Around Europe it has been widely reported that Spain is about to officially request a bailout, and this apparent clarity has seen bond markets move and Spanish sovereign debt yields drift lower."
In the end, the FTSE 100 slipped by 11 points, or 0.2%, to close at 5,809. The FTSE 250 added 27 points, or 0.2%, to close the trading day at 11,894. This comes after a significant rally in the previous trading session.
The main FTSE 100 winner during the trading day was International Consolidated Airlines Group (IAG). Shares in the company jumped by 3%. Meanwhile, shares in Royal Bank of Scotland (RBS) declined by just over 3%, making it the biggest large-cap loser of the day.
Looking ahead to Wednesday, two of the UK’s leading supermarket chains--Sainsbury (SBRY) and Tesco (TSCO)--will update shareholders on their recent performance.
"The battle of the supermarket retailers remains a fascinating event, as not only can we use them as a broader gauge of the general health of the UK consumer (note that £1 in every £10 spent in the UK arrives in Tesco’s) but it can also provide another opportunity to see whether Tesco can continue to bounce back from weakness earlier this year after the chain lost market share to its competitors such as Sainsbury’s," said Joshua Raymond, chief market strategist at City Index.
"On Wednesday morning at 7am, before the start to trading in the UK, Tesco reports their half year earnings whilst Sainsbury’s will update the market on its trading in the second quarter," said Raymond. "We will get a much updated picture on how the UK grocery market is faring as we head into the final months of 2012."