Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a751547

Supermarkets sweep up gains as nerves drag FTSE

by Daniel Grote on May 16, 2014 at 10:31

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 here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Look up the shares

  • WM Morrison Supermarkets PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • J Sainsbury PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Tesco PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • AstraZeneca PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Intertek Group PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

What others are saying

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet