Supermarket stocks were flying off the shelves today as investors welcomed signs of improvement at Morrisons.
Although City analysts said it was too soon to tell whether the grocer has turned the corner, its shares jumped 6.2 per cent, or 10.1p, to close the session at 172.5p after revealing a slowdown in its sales decline.
The cheer spread to others in the sector, with market leader Tesco adding 5.75p to finish at 181.5p and Sainsbury’s gaining 6 per cent, or 14.9p, to 262.2p.
Marks & Spencer continued to do well after surging 10 per cent yesterday in the wake of better-than-expected half-year profits and signs of improved trading in womenswear.
The shares were up a further 5.9 per cent to 470.4p after analysts at UBS and Deutsche Bank raised their ratings on the retailer from “hold” to “buy”.
Rival Debenhams closed up 2.3p, or 3.6 per cent, at 66.6p after Mike Ashley’s Sports Direct sold a 4.6 per cent stake but took an option to buy an extra 6.1 per cent holding in the store chain.
However, Trustnet Direct market analyst Tony Cross said “it wasn’t all rosy in the FTSE 100”, which ended the day just 12.01 points higher at 6,551.15.
Cross added: “Miners and oil stocks were dragged lower along with commodity prices, which remain under pressure due to the strength of the US dollar and concerns over the slowdown in China, the world’s most voracious consumer of raw materials. But with the theme of stimulus set to dominate the closing weeks of the year there is every chance the FTSE 100 could still reach the heady heights of 7,000 by the year-end.”
Heavyweight stocks weighed on the top flight, with drug maker GlaxoSmithKline down 22.5p to 1,413.5p. AstraZeneca was off 28.5p at 4,591.5p, even though the latter upgraded its sales guidance to show low single-digit growth this year.