London midday: UK market rises despite Greek uncertainty, supermarket stocks gain

Strong gains from supermarket, oil and mining stocks bolstered UK markets on Wednesday as investors shrugged off worrying reports that creditors have rejected Greece’s reform proposals.

The FTSE 100 was up 0.29% at 6,854.95 by midday, with blue chips Sainsbury’s, Shell and BHP Billiton among the best performers.

Eurozone finance ministers are to hold their third Eurogroup summit in less than a week on Wednesday evening to talk over the tax and spending proposals put forward by Athens at the weekend.

Ahead of the summit, Greek prime minister Alexis Tsipras is to travel to Brussels to discuss his plans in emergency meetings with EU Commission president Jean-Claude Juncker, ECB president Mario Draghi and IMF head Christine Lagarde.

However, markets across Europe dropped sharply into the red in morning trade after it was reported that Tsipras told associates that the measures he put forward in an attempt to unlock much-needed funds have been turned down by Greece’s lenders.

Analysts have raised concerns over Greece’s proposal to raise €8bn over the next two years, given the potential squeeze on pensioners, consumers and corporations in an economy already in recession.

Investors were also keeping their eyes out for the Commerce Department’s updated estimate of first-quarter US gross domestic product growth later on. Economists broadly expect revised figures to show an annualised 0.2% decline in GDP for the first three months of 2015, compared with the 0.7% contraction originally reported.

Supermarkets lead gains

Sainsbury’s was rising strongly after being boosted by a Societe Generale ratings increase to ‘buy’ and target price upgrade from 260p to 315p, pointing to a resilient profile and attractive valuation.

Sector rivals Morrisons and Tesco were also in demand after the news of a mega-merger between European peers Ahold and Delhaize.

Elsewhere in the retail sector, high street fashion group Next also rose after Barclays Capital lifted its recommendation to ‘overweight’ and lifted its target price from 7,400p to 9,000p.

Oil major Shell was in the lead in the energy sector after Deutsche Bank upgraded the shares to ‘buy’, saying that the risk/reward balance is “now firmly in our favour” ahead of the impending BG Group takeover.

Meanwhile, Credit Suisse upgraded BHP Billiton to ‘neutral’ from ‘underperform’, saying it is “now more constructive” on the stock after a 11% fall over the last three months.

Airline giant IAG was flying lower on speculation that its takeover of Aer Lingus could be delayed by the European Union Commission’s competition law directorate.

Chemicals company Elementis plummeted 16% on the FTSE 250 after warning that its full-year earnings per share will miss market expectations due to a significant reduction in oil projects in North America.

Market Movers
techMARK 3,205.06 -0.29%
FTSE 100 6,854.95 +0.29%
FTSE 250 17,919.11 -0.44%

FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 185.30p +3.06%
Sainsbury (J) (SBRY) 276.20p +2.60%
Royal Dutch Shell 'B' (RDSB) 1,924.00p +1.91%
Royal Dutch Shell 'A' (RDSA) 1,890.50p +1.89%
BG Group (BG.) 1,107.00p +1.70%
BHP Billiton (BLT) 1,376.00p +1.47%
Next (NXT) 7,580.00p +1.40%
SABMiller (SAB) 3,441.50p +1.37%
Carnival (CCL) 3,301.00p +1.32%
Anglo American (AAL) 1,009.50p +1.28%

FTSE 100 - Fallers
Sage Group (SGE) 538.00p -2.00%
Taylor Wimpey (TW.) 190.30p -1.91%
Barratt Developments (BDEV) 620.50p -1.90%
GKN (GKN) 352.20p -1.81%
Persimmon (PSN) 2,002.00p -1.38%
Inmarsat (ISAT) 960.00p -1.23%
Travis Perkins (TPK) 2,179.00p -1.18%
Hammerson (HMSO) 636.50p -1.09%
International Consolidated Airlines Group SA (CDI) (IAG) 520.50p -1.05%
Hargreaves Lansdown (HL.) 1,236.00p -1.04%

FTSE 250 - Risers
Genus (GNS) 1,486.00p +3.05%
Poundland Group (PLND) 321.60p +1.93%
Fidelity China Special Situations (FCSS) 164.00p +1.86%
Fidessa Group (FDSA) 2,247.00p +1.86%
Rank Group (RNK) 218.50p +1.72%
Home Retail Group (HOME) 168.50p +1.69%
OneSavings Bank (OSB) 304.90p +1.63%
Telecom Plus (TEP) 862.50p +1.47%
Capital & Counties Properties (CAPC) 419.30p +1.38%
Entertainment One Limited (ETO) 361.30p +1.18%

FTSE 250 - Fallers
Elementis (ELM) 261.10p -16.31%
Hunting (HTG) 617.50p -7.00%
Evraz (EVR) 133.00p -4.80%
Ladbrokes (LAD) 135.20p -3.43%
Just Eat (JE.) 410.80p -3.09%
Redrow (RDW) 441.70p -3.05%
Serco Group (SRP) 129.40p -2.93%
Nostrum Oil & Gas (NOG) 554.00p -2.81%
Bovis Homes Group (BVS) 1,116.00p -2.70%
Euromoney Institutional Investor (ERM) 1,114.00p -2.54%