Supermarket gloom as the market soars
London's blue-chip share index powered to its highest level for more than four years yesterday as America's earnings season got off to an upbeat start.
The FTSE 100 Index closed up 45 points to 6098.7, after gaining more than £11.4 billion – a height not seen since May 2008.
Across the Atlantic the Dow Jones Industrial Average on Wall Street was more than 80 points higher in early trading.
Banking stocks led the top flight charge after UBS upgraded Lloyds Banking Group from neutral to buy and raised its price target to 60p on the hope that rising margins, falling costs and lower provisions for bad debt will boost profitability. Its shares leapt 5% higher, up 2.5p to 53.4p, while Royal Bank of Scotland was up 12.9p to 349.9p and Barclays lifted 7.6p to 294.8p.
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But supermarket shares were among the fallers. Concerns over slowing sales growth at Sainsbury's overshadowed resilient trading for the key Christmas period and sent shares 3% into the red, down 9.8p to 329.2p.
Rivals Morrisons and Tesco – which reports its figures today – were also dragged lower, down 1.3p to 252p and 2.4p to 349.2p respectively, as experts said the sector would find it hard to grow profits over the year ahead.