Tesco (LON: TSCO) share price continues to have a strong upside pressure after the inflation rate slid to 7.9% annually in June, beating analysts’ expectations of 8.2%. This led to a strong bounce in the share price of the UK retail giant. The latest analysis suggests the price still has a lot of upside potential.
FTSE 100 index rose by 2.23% in July due to a decrease in the YoY inflation. The index also got tailwinds from the recent surge in energy stocks. For Tesco shares to see new highs in its price, FTSE 100 also has to extend its gains in the coming months. The index is sitting at 7,672 points at press time.
Tesco Initiates Buyback Programme
In April 2023, the UK retail giant announced a buyback of shares worth £750 million by April 2024. As of 28th July 2023, Tesco has already bought back £429 million worth of shares. The sole purpose of this move is to reduce its share capital, which in return would drive the Tesco share price upwards.
The decrease in UK inflation has boosted demand for groceries as consumers have more disposable income to spend. However, despite a cooldown in inflation. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, warns of a weakening economy. He believes that the effects of increased taxation and the increase in interest rates are yet to appear.
Tesco Share Price May Retest 272p In Coming Weeks
The chart of LON: TSCO shows that the shares are changing hands at 258.3 at press time. For the last few days, the shares are having a pullback. The stock closed the first trading session of the week with a 1.3% loss. However, this pullback could be healthy and it appears that the bulls are resting before taking the price towards 272p, which is a key resistance level.
Tesco share price forecast is looking quite bullish as the shares have gained strength above the 200 MA level, 248p. This is another strong signal that suggests that Tesco stock still has bullish momentum.
In the meantime, I’ll keep sharing updated Tesco stock price forecasts and my personal trades on my Twitter, where you are welcome to follow me.
