Tesco PLC (LSE:TSCO) shares climbed as it launched the first tranche of the £1 billion share buyback it promised with its results earlier this month.
This will involve Citigroup buying back a £450 million trolley of shares.
Tesco made an adjusted retail profit of £2.8 billion last year, when it also sold the majority of its banking operations to Barclays.
It also hiked its dividend 11% to 12.1p.
Shares in the supermarket chain were up 2.4% to 288.07p in early trading.