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FTSE100 moves firmly away from three-year lows

Published: 16:59 15 Dec 2015 GMT

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London’s blue-chip stocks surged throughout the afternoon as investors got into the season of goodwill and bought some unloved FTSE stocks.

A classic example of this, according to Chris Beauchamp at IG, has been the supermarkets.

Kantar Worldpanel data this morning showed that only Sainsbury’s (LON:SBRY) enjoyed any sales growth among the big four, with Tesco (LON:TSCO) still in decline versus its peers and the challenger discount stores.

A pick up in online sales helped to bolster the supermarkets, while Fraser McKevitt, head of retail at Kantar Worldpanel said that although discounters have been popular for most of the year, consumers are more likely to do their Christmas shopping at the ‘Big Four’.

For now the shares are up, with investors reasoning that Christmas will provide some positive news and provoke a short-term rally.

On the FTSE100, given the heavy losses of the first weeks of December a bounce was always likely, Beauchamp said.

Leading the risers, as it had throughout the day, was South Africa-focused life insurer Old Mutual (LON:OML).

Investors were still cheering the news that well-respected Pravin Gordhan will be South Africa's next finance minister, the third in little more than a week.

Elsewhere, there was speculation that Shire (LON:SHP) was among several firms considering bids for US drug company Intercept Pharmaceuticals, which develops treatments for chronic liver diseases.

Intercept is understood to have received several approaches and has appointed investment bank JP Morgan to assess them, according to a market source.

Other potential bidders for Intercept are said to include GlaxoSmithKline (LON:GSK) of the UK and companies in Switzerland and the US.

Away from the index, engineering data software firm Aveva (LON:AVV) has failed in a bid to merge with France's Schneider Electric.

Aveva said the boards of the two companies had been unable to agree a deal and had terminated discussions by mutual consent.

In the small cap arena, shares in Norway-focused copper-zinc miner Kodal Minerals (LON:KOD) rose after it booked another impairment charge on its Kodal project of £41,000 in the six months to September 30.

Also in demand was Sunrise Resources (LON:SRES), as investors continued to bask in the glow from US and Australia-focused precious metal miner after it unveiled lower annual losses.

Caza Oil & Gas (LON:CAZA) was also on the rise, as the US oil & gas explorer arranged a US$45mln refinancing that will clear most of its debt but leave existing shareholders with under 3% of the company.

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