Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Supermarkets sweep up gains as nerves drag FTSE

Supermarkets sweep up gains as nerves drag FTSE

Supermarkets have topped the leaderboard of an otherwise stagnant FTSE 100, as fears of a price war among grocers begin to wane.

Morrisons (MRW) was the biggest riser, adding 8p, or 3.9%, to reach 213.2p, amid reports a US-led private equity consortium was preparing a bid for the supermarket. The Daily Mail cited speculation that Morrisons’ US shareholders Brandes Investment, Ameriprise Financial and BlackRock had received bids for their holdings. However, Morrisons has not commented on the speculation of a £6.4 billion, or 275p per share cash offer.

The big supermarkets meanwhile received a boost from claims made by Asda owner Walmart that its strategy of cutting prices in the UK had reduced the number of customers defecting to cheaper rivals like Aldi and Lidl. Investor relief that a possible supermarket price war might not be on the cards led Sainsbury (SBRY) to add 9.6p, or 2.9% to 342.4p, while Tesco (TSCO) traded 5p, or 1.7%, higher at 307.5p.

AstraZeneca (AZN) also rose, by 65.5p, or 1.4%, to £47.92p as investors awaited further developments on US rival Pfizer’s proposed takeover bid.

Intertek (ITRK) fell to the bottom of the FTSE 100 as the business supplier announced disappointing results for the first four months of the year. Organic growth stood at just 0.3%, compared to 7% this time last year, while a number of projects have been deferred. ‘With revenues barely growing organically and hindered by a strong pound, cost control will be paramount with an outlook citing variable growth in key businesses and weak demand in others,’ said Mike van Dulken, head of research at Accendo Markets.

Beyond grocers there were few big gains on the FTSE 100, which added just seven points, or 0.1%, to trade at 6,848. Investor nerves over lofty valuations have taken hold after a slew of mixed economic data from Europe and the US.

Yesterday’s news that growth in the eurozone stood at just 0.2% in the first three months of the year was quickly followed by data from the US showing industrial output fell at its fastest rate in more than one-and-a-half years in April.

‘European equities have opened pretty much flat as traders remain nervous following recent falls,’ said Jonathan Sudaria, trader at Capital Spreads. ‘The European data was more of an excuse for already pent-up selling pressure that had built up as we reached key technical levels. There doesn’t appear to be much appetite for bargain hunting on the open so traders need to be wary of the bears gaining momentum going into the weekend.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter