Market Report: Contrarian investors help Morrisons advance

WM Morrison managed to reach its highest level for more than six months last night after the supermarket was picked out as a great bet for "contrarian investors". The group jumped up 3.1p to 297.9p, the latest rise in a run that has seen it lifted nearly 8 per cent since the start of April, as HSBC said the food retailers – and Morrisons in particular – were the best choice for those who like to go against the crowd.

Noting that "institutional investors have been reducing their holdings in [the sector] for over two years", the broker claimed "food retail has outperformed in the past when institutions have been underweight". This pessimism makes the sector "resilient to shocks and bodes well for future returns", its analysts said, as Tesco advanced 2.45p to 406p while J Sainsbury ticked up 1.7p to 350p.

Morrisons was also helped by positive words ahead of tomorrow's trading update, with Evolution Securities highlighting "recent market data [which] suggests [it] has returned to sector leading growth", and Shore Capital suggesting the recent run of bank holidays could lead "to a pleasant surprise".

However, the supermarkets' fortunes were in stark contrast to the wider sector after the latest report from the Confederation of British Industry revealed retailers think this month will be the worst for almost a year. Next, which is set to release an update today, fell 15p to 2,222p, while Marks & Spencer declined 3.6p to 384.4p, and there were also losses for Kingfisher – down 4p to 270.5p – and Home Retail – down 2.7p to 217.2p – with the survey showing another drop in sales last month of DIY and hardware goods.

Those hoping for a major rally following the death of Osama bin Laden were disappointed as the FTSE 100 edged up just 12.98 points to 6,082.88. A fall in metal prices meant a number of the blue-chip miners headed downwards, including Randgold Resources which slipped back 244p to 4,976p.

Rio Tinto was another left behind, easing down 67.5p to 4,292.5p, despite Credit Suisse keeping its "outperform" rating. Speculation – played down by traders – spread late in the session that the miner was close to submitting a takeover bid for the US group Alcoa, with a price mentioned of $25.50-a-share.

Global merger and acquisition activity elsewhere in the world provided a boost for the drug-makers following Teva Pharmaceutical's announcement on Monday that the Israeli group has agreed to buy Cephalon for $6.8bn. With further help coming from Pfizer posting impressive results, Astra- Zeneca shifted forwards 72p to 3,062p while Shire – itself frequently talked about as a potential bid target – gained 28p to 1,878p.

A surge of 8.3p to 258p left Man Group in pole position after it launched in Japan its largest fund since the financial crisis. At the opposite end, Smiths Group shed 76p to 1,256p as the technology group warned its airport security business was not on track to meet expectations and that the unit's boss Stephen Phipson was leaving his position.

Growing fears over the state of the advertising recovery meant ITV was driven back 1.65p to 74.4p, with Bank of America Merrill Lynch sounding the alarm. The broker said "trends appear to have deteriorated sharply into the second-quarter", and reduced its expectations for the broadcaster's advertising growth this year to 0.9 per cent from 3.3 per cent.

Down on the FTSE 250, Ferrexpo – a persistent subject of takeover speculation in recent weeks – failed to maintain an initial surge that saw it reach 522.5p in early trading, eventually closing 6.1p lower at 492.9p.

Lamprell was knocked back after the group, which upgrades and refurbishes oil and gas rigs, revealed the first four months of the year had seen it bring in $57m-worth of contracts. Analysts from Evolution Securities said the update "underlines our forecast for strong revenue and earnings growth from all businesses in 2012", yet this was not enough to prevent it dipping 8.4p to 362.8p.

Investors also seemed to disagree with analysts over William Hill, as the bookmaker announced it was spending $14.25m on the US sports betting group Brandywine. Espirito Santo welcomed the news, calling it "a small but strategically important acquisition" that continues its "strategic moves to become relevant in the US market as and when regulation comes through", but William Hill still plummeted 5.8p to 217.7p.

There was a major spurt of 3.5p to 18.5p on the Alternative Investment Market for Powerflute Oyj after the packaging company announced it was disposing of its graphic papers unit for €38.5m (£34.6m).

Meanwhile, on the small-cap index a profit warning from Thorntons – which the chocolatier blamed on the effects of the recent sunny weather on the key Easter trading period – meant it dropped nearly 13 per cent, moving 10.25p lower to 70p.

Start your day with The Independent, sign up for daily news emails
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Sport
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all