Sainsburys leads FTSE surge

Supermarket giant Sainsbury’s led a surge by the London market today as investors acted on renewed takeover speculation.

The stock was at the top of the FTSE 100 risers by mid-morning, up nearly 4% or 10.75p to 287.75p following similar gains yesterday.

Sainsbury’s has been considered vulnerable to a takeover bid after it lost ground over the past 12 months to rivals Asda and Tesco due to stiff price competition.

It came as the Footsie climbed 20.3 points to 4558.3, shrugging off a mixed session in New York and a recent hike in oil prices.

Financial stocks were also doing their best to prop up the top flight with Barclays 7.75p higher at 535.25p and Royal & Sun Alliance 0.75p stronger at 74.75p.

In terms of corporate news, airports operator BAA lifted half a penny to 564p as it reported its busiest August on record after 14.2 million passengers used its seven sites during the month.

The heaviest faller was catering group Compass, which slipped 3.75p to 235.5p as it continued to feel the impact of yesterday’s warning on full-year profits.

Outside the top flight, Punch Taverns cheered 3% or 14.5p to 516.5p after announcing a £335 million deal to snap up more than 1,000 community pubs.

Signs of improved trading at nightclub group Luminar enabled the stock to brighten by nearly 6% or 24p to 433p. In a trading update Luminar said like-for-like sales for August were down 2.2%, compared with 4.1% in July.

Kitchen equipment group Aga Foodservice was upbeat, rising 5p to 233p, after serving up an 8% rise in half-year profits and forecasting a “significant boost” from a new product.

However, Premier Foods weakened a penny to 230p after maiden half-year results showed a 29% rise in operating profits to £31.2m (€45.7m).