Supermarkets hit as FTSE 100 retreats

Reuters - UK Focus

* Supermarket retailers fall as survey shows market shareloss

* Sainsbury (Frankfurt: SUY1.F - news) falls 3.5 pct after Kantar survey

* Fed tapering uncertainty also weighing on stock market

* FTSE 100 down 0.4 pct in late session trading

By Sudip Kar-Gupta

LONDON, Dec 17 (Reuters) - Britain's main equity index fellon Tuesday, with major supermarket groups hit by fresh signs ofa loss of market share, while uncertainty over future U.S.monetary policy also weighed on the stock market.

The blue-chip FTSE 100 index fell by 0.4 percent, or26.77 points, to 6,495.73 points in late session trading,retreating after a 1.3 percent gain on Monday.

Supermarket retailers were among the worst-performing FTSEstocks after a survey from market researcher Kantar Worldpanelshowed that more than half of Britain's households shopped atGerman discount grocers Aldi or Lidl overthe past 12 weeks.

The data showed that the UK's "big four" supermarkets -Tesco (Berlin: TCO.BE - news) , Sainsbury, Wal-Mart's Asda andWM Morrison - had continued to lose market share.

Shares in Sainsbury fell 3.5 percent to the bottom of theFTSE 100 index while WM Morrison dropped 2.4 percent and Tesco (Frankfurt: TS3.F - news)declined by 1.7 percent.

"The top supermarket firms are losing market share at thebottom end to Aldi and Lidl, and losing out at the top end toWaitrose," said Hartmann Capital trader Basil Petrides.

UNCERTAINTY OVER FED TAPERING

A further factor weighing on stock markets was a U.S.Federal Reserve meeting, starting on Tuesday and ending onWednesday, at which the Fed may start to scale back an economicstimulus programme that has driven much of this year's globalequity rally.

The majority of investors and economists expect the Fed towait until March 2014 to begin winding down its "quantitativeeasing" (QE) programme.

However, stronger-than-expected U.S. economic data, alongwith last week's budget deal in Washington, have led some tospeculate the Fed may act this week.

"People have taken some gains off the table prior to the Fedmeeting," said JNF Capital trader Rick Jones.

However, Jones felt the pullback was a chance to buy stockscheaply. He expected equity markets to rise again in 2014 as theglobal economy gains momentum.

Jones expected the FTSE 100 to end 2013 in the 6,700-6,900point range, with the FTSE still up by around 10 percent sincethe start of 2013.

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