With markets moving higher - albeit nervously - on hopes of a Greek deal, Morrisons was celebrating retaining its place in the FTSE 100.
The supermarket group’s shares moved higher on Tuesday after better than expected sales figures as shown by the latest Kantar Worldpanel report. That was enough to save it from relegation to the FTSE 250 - something which had looked likely as late as Monday night - and its shares jumped another 5.6p to 178.1p.
Other supermarkets were also in demand, with Sainsbury up 4.7p at 249.8p and Tesco 2.95p better at 210.4p.
Aggreko, which was the unfortunate actually ejected from the leading index, added 3p to £15.62. The changes take effect from the start of trading on 22 June.
Overall the FTSE 100 finished 22.19 points higher at 6950.46 ahead of a late night meeting between Greek prime minister and representatives of the country’s creditors, in another last ditch effort to reach an agreement on its finances before the cash runs out.
Meanwhile the European Central Bank used its latest press conference to play down any idea that it might end its bond buying programme early. But comments from president Mario Draghi that volatility in the bond market was something investors had to live with sent yields on German bunds - as well as Spanish and Italian bonds - higher once more.
Back with equities and Vodafone fell 4.2p to 250.4p after increased losses from its Qatar business.
BHP Billiton slipped 16.5p to £13.67 as it warned that oversupply and low commodity prices would last for a prolonged period.
But BG was 4.5p better at £11.30 as it completed the sale of its Queensland pipeline and export facility to APA group, with gross proceeds of $4.6bn going to the group.
Among the mid-caps Workspace jumped 60p to 980p as the property group, which specialises in rentals for small businesses, reported a 42% rise in full year net asset value and raised its final dividend by 15%. It also announced the acquisition of a former tobacco warehouse in Islington. Chief executive Jamie Hopkins told analysts: “Property companies will be judged on their technology, it is now location, location, technology.”
Melrose added 6.9p to 274.7p as UBS moved its recommendation on the acquisitive engineering group from neutral to buy:
Our neutral rating on Melrose over the past year or so reflected our view that the next deal was not imminent, and therefore that mixed end-market trends would limit performance. However, while the next deal may still not be imminent, our sector analysis highlights the benefits of margin improvement in a slow-growth environment. This is combined with reduced trading risk in our view.
Melrose operates a buy, improve, sell model and is looking for its next £1bn-£3bn deal – with the target being to at least double shareholder equity on any deal. We can’t predict the exact timing of the next Melrose deal, but history suggests that management can deliver. They have improved margins by 600-700 basis points within 4 years on their last two deals. We see limited other self-help opportunities in our wider sector coverage group and it is the repeating frequency of self-help at Melrose that we find attractive.
