FRIDAY MARKET CLOSE: Bid chatter lifts supermarket shares

Speculation that recent share price weakness might lead to a takeover bid for one of the listed supermarket operators kept the sector on the front foot.

Michael Hewson, chief market analyst at CMC, said: “Supermarkets are the best performers with Morrisons, Tesco and Sainsbury’s heading up the FTSE leader board, with vague chatter surrounding a possible bid for Morrisons from a US private equity group.”

With Sainsbury’s also occasionally touted as a bid target, it was the biggest riser, up 4.5 per cent at 347.7p. Morrisons was 3.8 per cent higher at 212.9p and Tesco climbed 2.6 per cent 310.45p as it continued to feel the glow from positive results from rival Asda earlier in the week.

The sector helped the FTSE 100 Index keep its all-time highs within sight, as it closed 14.92 points up at 6,855.81.

The top flight’s performance contrasted with that of the FTSE 250, which was down 218.62 points at 15,397.92, following a hefty drop in the previous session. Analysts said valuations in the domestically-focused second tier were coming under scrutiny following big gains on the back of the strengthening UK recovery.

Airline and travel stocks endured another tricky session as tours to Kenya were cancelled amid a terrorism alert. An update from Germany’s Tui, which owns a stake in Thomson and First Choice business Tui Travel, failed to boost spirits despite the company reporting a smaller winter loss.

Tui was down nearly 4 per cent or 16.1p to 407.7p while Thomas Cook fell 3.4p to 152.7p, adding to the 13 per cent plunge in the previous session following its latest trading update.

EasyJet was down 34p to 1,516p, as the stock lost some of its recent froth, and British Airways owner IAG was off 7.4p to 358.3p.