Big guns lead market revival

Apr 16 2008 by Peter McCusker, The Journal

BLUE CHIP big guns Tesco and AstraZeneca led a revival yesterday as the London market broke a five-day losing streak.

The grocery giant’s £2.85bn profits haul and the settling of a patent dispute by the drugs company pushed them up the risers board, with gains from heavyweight mining stocks underpinning progress.

This helped the FTSE 100 Index to gains of more than 1%, closing 75.3 points higher at 5906.9. Wall Street also made early progress amid better than expected manufacturing figures and upbeat results from the likes of consumer giant Johnson & Johnson.

In London, Tesco was the best performer after reporting annual profits up 11.8% and like-for-like sales ahead by more than 4% in the first five weeks of the new financial year.

Shares were up 28.5p to 419.5p on the back of the update – more than 7%. Rivals Sainsbury’s and Morrisons followed Tesco higher, adding 7p to 366p and 6.5p to 283.75p respectively.

Drugs firm AstraZeneca was also in demand after it secured an agreement with India’s Ranbaxy Laboratories to end a lawsuit over patent infringements for its Nexium heartburn drug. The verdict on a key product in the Astra portfolio lifted shares 7%, or 141p, to 2122p.

In the local stocks DI Oils rose 4% to 37.25 on the day new government regulations on the use of biofuels came into force

Elsewhere, Friends Provident managed to claw back some losses after yesterday’s ultimatum from bidder JC Flowers. Shares were up 2.4p to 118.9p.

Anna McKechnie Investment advisor Brewin Dolphin