Supermarket merger talk buoys FTSE

Market report Emma Newlands

Sainsbury’s shares surged to the top of the FTSE 100, with the confirmed merger with Asda helping the blue-chip index end the day in positive territory.

The FTSE 100 closed up 7.09 points at 7,509.3, with J Sainsbury group shares coming out as the top performer after rising 39.2p to 309p.

Jasper Lawler, head of research at London Capital Group, said: “On the FTSE 100, the M&A spree continues. It’s been a Triple S of mergers Shire, Sky and now Sainsbury’s.

“The investor confidence on display via these big mergers and the softer pound have dramatically improved the fortunes for FTSE investors over the past week.”

He added that the proposed supermarket deal was “attractive” for shareholders, while in currency markets, the pound was mixed, falling 0.3 per cent against the US dollar to $1.373 but rising 0.3 per cent versus the euro to €1.137.

In UK stocks, Carpetright fell 1.55p to 41.1p as the company said it expects to book annual losses of up to £9 million. It comes as the struggling retailer’s shareholders rubber-stamped a mass store closure programme through a Company Voluntary Arrangement.

Aviva rose 4p to 529p, amid news that it would make a £14m “goodwill payment” to shareholders who lost out when it cancelled £450m worth of preference shares, before the insurance giant U-turned on the plans.

The biggest risers on the FTSE 100 included Antofagasta, up 18.4p at 972.4p, and Pearson, up 11.6p at 833.8p. The biggest fallers included Glencore, down 18.3p at 350.7p, and Micro Focus International, down 21p at 1,253p Shares jumped on the back of a smaller-thanexpected drop in first-quarter net sales, just weeks after the departure of Sir Martin Sorrell. Shares tumbled as the embattled outsourcer fell deeper into the red after its chairman bemoaned “selfinflicted mistakes of the past”.