Christmas comes early for the grocery store giants: MARKET REPORT

Christmas came early for supermarket giants Tesco and Sainsbury’s after analysts at JP Morgan upgraded their ratings for both to ‘overweight’ from ‘underweight’.

The US bank’s moves came in a note highlighting potential upside in the UK grocery sector into 2025. 

The analysts said they are more constructive overall on the UK, while they believe that the EU food retail sector will be more in stock-picker territory.

Sainsbury’s added 3.1 per cent, or 7.8p, to 261.2p and Tesco rose 2.3 per cent, or 8.3p, to 366.2p.

With US markets closed for Thanksgiving, the mood in London was subdued. The FTSE 100 closed 0.1 per cent, or 6.47 points, higher at 8281.22, while the FTSE 250 ended 0.8 per cent, or 161.15 points, firmer at 20,762.78.

Airlines continued to take off following easyJet’s bullish update, with a number of brokers hiking their price targets following its record summer profit.

Supermarket dash: Sainsbury’s added 3.1% and Tesco rose 2.3% after analysts at JP Morgan upgraded their ratings for both to ‘overweight’ from ‘underweight’

EasyJet rose another 2.6 per cent, or 14.2p, to 552.4p, while British Airways owner IAG gained 2.2 per cent, or 5.5p, to 260.6p as investors bet on a re-rating for the sector which has been fairly moribund since the pandemic.

Broker comment saw engineer Spirax Group top the FTSE 100 leaderboard, adding 3.8 per cent, or 260p, to 7160p, boosted by an upgrade to ‘outperform’ from analysts at BNP Paribas Exane, as well as an initiation at ‘buy’ from analysts at Citi.

But food producer Cranswick was hit by a downgrade by analysts at RBC Capital Markets, losing 0.6 per cent, or 30p, to 4960p.

Galliford Try gained 2.2 per cent, or 8p, to 378p as the construction firm reported sustained operational momentum into its new fiscal year, noting that it is trading in line with expectations.

Impax Asset Management added 3.9 per cent, or 12.5p, to 334p as the firm highlighted potential upsides to the second US presidency of Donald Trump and maintained its dividends despite falls in full-year profit, revenue and assets under management.

But Ocado shed 2 per cent, or 6.6p, to 318.4p following news that supermarket chain Morrisons will stop using one of its bases in favour of filling more customer orders from its own stores. 

Ocado said it will free more capacity for its venture with Marks & Spencer.

Tullow Oil dropped 7.9- per cent, or 1.8p, to 21p after it said its free cash flow would be below previous guidance due to the timing of payments, although it said it was still on track to meet full-year production guidance.

Fellow oil and gas firm Energean was also weak – down 8.9 per cent, or 97p, to 998p – as it said its full-year total production would be below previous guidance.

On AIM, James Latham dropped 9.3 per cent, or 120p, to 1170p as the timber and panel products specialist posted a decline in first half revenue and profitability.

And Scholium Group, the owner of the Shapero Rare Books bookshop, plunged 9.7 per cent, or 3.5p, to 32.5p as it unveiled plans to delist its shares from AIM as a cost-saving measure.