FTSE 100 movers: Sainsbury surges on upgrade, but IAG hit by takeover delay speculation

London markets were subdued on Wednesday, as gains in the supermarket, oil and mining sectors were offset by weaker performances from chemicals, software, and financial services stocks.

As of 13:45 BST, the FTSE 100 was trading broadly flat at 6,843.

Sainsbury surged after being boosted by a Societe Generale upgrade to ‘buy’ and target price lift to 315p from 260p, as the broker pointed to a resilient profile and attractive valuation.

Sector rival Morrisons was also in demand, on reports 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 its target price to 9,000p from 7,400p.

Oil major Shell led the energy sector higher, as 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.

BHP Billiton gained as analysts at Credit Suisse upgraded its rating to ‘neutral’ from ‘underperform’, saying it is “now more constructive” on the stock after an 11% fall over the last three months.

Cruise line operator Carnival extended Tuesday's gains, which came as profits almost tripled in the second quarter, as lower fuel costs produced stronger-then-expected yields.

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.

Risers
Morrison (Wm) Supermarkets (MRW) 184.80p +2.78%
Sainsbury (J) (SBRY) 275.70p +2.41%
Royal Dutch Shell 'A' (RDSA) 1,892.00p +1.97%
BG Group (BG.) 1,109.00p +1.88%
Royal Dutch Shell 'B' (RDSB) 1,921.50p +1.77%
BHP Billiton (BLT) 1,379.50p +1.73%
Anglo American (AAL) 1,012.50p +1.59%
Carnival (CCL) 3,309.00p +1.57%
Royal Mail (RMG) 517.00p +1.47%
SABMiller (SAB) 3,440.50p +1.34%

Fallers
Sage Group (SGE) 532.50p -3.01%
Taylor Wimpey (TW.) 189.30p -2.42%
Hargreaves Lansdown (HL.) 1,221.00p -2.24%
Barratt Developments (BDEV) 619.00p -2.13%
Persimmon (PSN) 1,992.00p -1.87%
GKN (GKN) 352.20p -1.81%
Hammerson (HMSO) 633.50p -1.55%
Inmarsat (ISAT) 957.00p -1.54%
SSE (SSE) 1,616.00p -1.40%
Babcock International Group