Sector movers: Tesco, precious metals miners sharply higher

Tesco shares rocketed at the end of the week, pushing the sector gauge sharply higher.

The supermarket giant announced it had agreed to merge with the UK’s largest food wholesale operator Booker Group. Under the terms of the merger, each Booker scheme shareholder would receive 0.861 new Tesco shares and 42.6p in cash, representing a value of £3.7bn for Booker’s ordinary share capital.

"This morning’s merger with food wholesaler and small mini mart owner Bookers will not only help the company drive down costs in the supply chain but also open up a host of new “Metro” type stores that seem to be the hallmark of the new food retail market these days.

"It will inevitably raise competition concerns amongst its rivals given that Tesco already has 28% of the grocery retail market, and as such will give it even more pricing power," said Michael Hewson, chief market analyst at CMC Markets UK.

Precious metals miners were close behind on the leaderboard, bouncing back from the losses sustained during the previous session and despite falling prices for gold and platinum.

As of 1717 GMT, the former was down by 0.26% to $1,189 a metric tonne on COMEX, while spot platinum was down 0.26% at $975.65/oz..

Gold exports from Switzerland to China rose by more than 400% in the run-up to the Lunar New Year.

"The rise in demand into China through the end of December and early January is dramatic," analysts at SP Angel told clients in a research note.

Stock in Randgold Resources was a relative laggard after analysts at Canaccord Genuity downgraded it from 'Buy' to 'Hold', lowering their target from 7,180p to 6,400p.

Ahead of the golddigger's full-year numbers due out on 6 February the broker told clients it expected a further recovery for the fourth quarter but that markets had already priced it in.

Top performing sectors so far today

Food & Drug Retailers 3,151.06 +6.15%
Industrial Metals & Mining 2,353.89 +2.98%
Mining 16,827.51 +1.06%
Health Care Equipment & Services 7,281.54 +0.99%
Software & Computer Services 1,815.60 +0.99%

Bottom performing sectors so far today
Pharmaceuticals & Biotechnology 12,919.33 -0.90%
Automobiles & Parts 8,120.10 -0.83%
Construction & Materials 6,845.49 -0.65%
Real Estate Investment Trusts 2,760.29 -0.64%
Aerospace and Defence 4,597.85 -0.63%