A big surge in supermarket shares helped to lift the FTSE 100 on Wednesday.
Under pressure from the rise of the discounters, the big four supermarkets have all been posting weak sales and profit figures. However, in one of the strongest signs yet that the rout may be ending, Sainsbury’s said its profits were set to beat market expectations.
The positive statement was still made as it reported a seventh successive quarter of falling sales, but it was enough to cause a 13.8% jump in Sainsbury’s shares. The other listed supermarkets also rallied sharply with Tesco rising 6.9% and Morrisons 6.4%.
The strong performance of the supermarkets helped to lift the FTSE 100 by 2.6%. Real estate shares also rallied with the FTSE REIT Index up 1.8% and the FTSE Real Estate Investment & Services Index up 1%.
However, it proved a good note on which to end a bad quarter. Equities have been hit hard by the slowdown in China and weak commodity prices causing the FTSE 100 to fall 7.4% in three months.