FTSE flat despite Tesco surge

Traders in London Image copyright AFP

Shares in supermarket giant Tesco soared after it agreed to buy food wholesaler Booker Group.

The retailer surprised the markets with its £3.7bn deal, which will result in Booker shareholders holding 16% of the combined company.

Tesco shares jumped 9% to 205.75p, while shares in Booker were up 16.7% at 213.70p.

Despite Tesco's rise, the wider market was little changed, with the FTSE 100 down 2.39 points at 7,159.10 by midday.

Shares in BT were unchanged after the telecoms firm reported a sharp fall in third-quarter profits, down 37%, as it comes to terms with its Italian accounting scandal.

The company also confirmed that Corrado Sciolla, head of continental Europe, would step down over the affair.

On the currency markets, the pound fell 0.4% against the dollar to $1.2541, and dropped 0.6% against the euro to 1.1729 euros.