CLOSER
UK shares closed convincingly 2.58% higher after losses earlier in the week as supermarkets gained after a positive update from Sainsbury's (LON:SBRY).
FTSE100 finished up 152 points at 6,061 with much written about commodity giant Glencore (LON:GLEN) taking pole position, up over 14% to 91.55p.
Sainsbury's gained 13.82% to 261p. Tesco (LON:TSCO), the UK's biggest grocer, and Morrison's (LON:MRW) also made it onto the list of top five gainers.
But Joshua Mahony, at IG warned traders not to get too excited
"Today felt a little like payback for markets as the bounce in equity indices comes amid rises for recently beleaguered names such as Glencore, Tesco and J Sainsbury.
"However, the overall picture remains worrying for bulls as the losses continue to outweigh the gains which come as almost an afterthought," he ruminated.
"Nothing buoys markets like the idea of more QE and for that reason, this morning’s data release from the eurozone certainly ticked the boxes to set up the second largest rally in September.
"Rising unemployment and a deflationary CPI number in the eurozone provide a perfect backdrop for Mario Draghi to further broach the idea of an extension and/or intensification of the current QE programme."
Elsewhere, over-50s insurer Saga (LON:SAGA) said motor insurance price increases seen in the second quarter of 2015 appeared to be sustainable.
Saga's shares rose 2.19% to 205.5p, while other insurers also gained. Aviva (LON:AV.) added over 5%. Prudential (LON:PRU) gained 4.74%.
Back in the UK, there was negative economic news with the UK consumer confidence index from market data group GfK falling four points to +3 in September.
British GDP growth in the second quarter was confirmed at 0.7% quarter-on-quarter; however year-on-year growth was trimmed to 2.4% from the previously reported 2.6%.
But the Nationwide Building Society buoyed sentiment in the housing sector by reporting a 0.5% rise in house prices in September, causing the year-on-year gain to climb to 3.8%.
Housebuilders benefited, with Persimmon (LON:PSN) gaining 0.45% to 2,008p
Topps Tiles (LON:TPT) lost 1.35% on a forecast of a 5.3% rise in like-for-like revenue in the 53 weeks to October 3.
French electrical retailer Darty (LON:DRTY) surged 19.14% higher to 96.5p on news that another French electrical and stationery retailer, Fnac, had approached it with an all-share offer valuing its shares at 101p each.
Strategic Minerals (LON:SML) rose 10% to 0.275p as its Cobre operation made a US$162,000 profit in the six months to June 30 against a loss of US$2,441,000 a year earlier.
Fulcrum Utility Services (LON:FCRM) powered up over 8.46 to 17.625p as the company, which connects factories, offices and homes to electricity and gas networks, said it was on track to meet full year expectations and confirmed plans to pay a maiden annual dividend of 0.4p per share.
The share price may also have benefited from an Ofgem announcement on Wednesday that gas network companies will increase grid connections to households in "fuel poverty" by 18% to more than 90,000 by 2021.
MID-SESSION
A positive update from Sainsbury's (LON:SBRY) and upbeat news from insurers drove the London market higher on Wednesday.
Sainsbury's fuelled positive sentiment with a statement forecasting annual profits above expectations. Its shares soared 33.3p or 14.52% to 262.6p.
Rivals Tesco (LON:TSCO) and Morrisons (LON:MRW) also benefited, rising 12.05p to 183.35p and 11.4p to 167.5p respectively.
The sector has been in need of a fillip as the established UK chains struggled to keep market share amid competition from discounters and online retailers.
Jasper Lawler at CMC Markets urged caution, saying there was "a lot of jumping the gun" on the Sainsbury's news.
"The supermarket sector still faces huge pressure from the discounters, particularly now with Aldi’s intended entry into online shopping," he said.
Meanwhile, over-50s insurer Saga (LON:SAGA) said motor insurance price increases seen in the second quarter of 2015 appeared to be sustainable.
Saga's shares rose 5.5p to 206.6p and other insurers also benefited. Aviva (LON:AV.) jumped 22p to 450.4p, Admiral (LON:ADM) advanced 36p to 1491p and Prudential (LON:PRU) climbed 57.5p to 1388p.
The news helped the FTSE 100 Index to motor ahead 139.42 points at 6,048.
Analysts also attributed the rise to hopes of more quantitative easing from the European Central Bank as the eurozone returned to deflation in September, with prices falling 0.1% year-on-year.
It was the first deflation since March and was down from consumer price inflation of 0.1% in August and 0.3% in May, according to Howard Archer at economic research firm IHS Global Insight.
Hopes of ECB action boosted the Dax in Frankfurt by 253 points to 9,703 and the CAC-40 in Paris by 123 points to 4,466.
Back in the UK, there was negative economic news with the UK consumer confidence index from market data group GfK falling four points to +3 in September.
British GDP growth in the second quarter was confirmed at 0.7% quarter-on-quarter; however year-on-year growth was trimmed to 2.4% from the previously reported 2.6%.
But the Nationwide Building Society buoyed sentiment in the housing sector by reporting a 0.5% rise in house prices in September, causing the year-on-year gain to climb to 3.8%.
Housebuilders benefited, with Persimmon (LON:PSN) gaining 6p to 2005p and Barratt Developments (LON:BDEV) hardening 3.5p to 641p.
In corporate news, Topps Tiles (LON:TPT) lost early gains to fall 3p to 145p on a forecast of a 5.3% rise in like-for-like revenue in the 53 weeks to October 3.
French electrical retailer Darty (LON:DRTY) sparked 13.25p to 94.25p on news that another French electrical and stationery retailer, Fnac, had approached it with an all-share offer valuing its shares at 101p each.
Mobile data services supplier Crimson Tide (LON:TIDE) rang up 0.1p to 1.88p after first-half pre-tax profit more than doubled to £60,000.
Strategic Minerals (LON:SML) rose by a tenth or 0.02p to 0.28p as its Cobre operation made a US$162,000 profit in the six months to June 30 against a loss of US$2,441,000 a year earlier.
African oil explorer Lekoil (LON:LEK) leaked a penny to 21p after saying it was in talks to secure potential funding for acquisitions.
Market preview
London’s blue chips are set to end the autumn quarter on the up according to the early indicators.
Financial spread bet firms suggest the Footsie may add more than 10 points when trading gets underway, even though US and Asian markets rallied overnight.
London fell 50 points to 5,980 yesterday.
One stat that is going to be quoted a lot is that world stock markets are heading for their worst quarter since 2011 despite any gains today.
China has been the main culprit with its main index, the Shanghai Composite, dropping almost 29% and pulling down other markets in Asia and also further afield.
US markets saw a mild bounce overnight, with the Dow Jones Industrial Average 47 higher at 16,049. Nasdaq eased slightly while the S&P 500 was flat.
Asian markets rallied with Tokyo climbing 3%, Hong Kong 1.5% and China 0.8%.
Company news will be dominated by supermarket Sainsbury’s (LON:SBRY) and few people are expecting an upbeat statement, though at least, according to the recent report from market research group Kantar, the chain has stopped losing ground to Aldi and Lidl recently.
Contract caterer Compass Group is also reporting while Topps Tiles will give an insight in to how much we are spending on our houses.