Business

Tesco bolsters FTSE as sales accelerate

London stock brokers (file photo) Image copyright AFP

(Close): Shares in supermarkets rose as figures indicated that Tesco's sales were growing at the fastest pace for three years.

Tesco shares rose 5.4% after research firm Kantar Worldpanel said its sales grew 2.2% in the 12 weeks to 6 November.

The UK's largest supermarket saw its market share rise to 28.2% from 27.9%.

Shares in other supermarkets also rose, with Morrisons up nearly 4.4% and Sainsbury's 2.2% higher.

At the close, the FTSE 100 index was up 39.56 points, or 0.59%, at 6,792.74.

The rise came despite a sell-off in mining stocks, as the recent rally in industrial metals halted. Shares in Anglo American, Glencore, Antofagasta, BHP Billiton and Rio Tinto were all down by between 4.5% and 6.7%.

The recent sell-off on the bond market also paused. Expectations that Donald Trump's victory in the US election will lead to a pick-up in inflation had led to a sharp rise in global bond yields - which move inversely to prices - in the past few days.

On Monday, the yield on UK 10-year government bonds had neared a six-month high of 1.5%, but on Tuesday, it stood at about 1.4%.

On the currency markets, the pound lost ground, with analysts blaming some of the losses on reports of a memo suggesting that the UK had no overall plan for Brexit.

A surprise fall in the UK inflation rate also weakened sterling. The pound was down 0.58% against the dollar at $1.2420, and fell 0.63% against the euro to €1.1569.