FTSE 100 watch: Sainsbury’s props up Footsie after Asda deal

Glencore share price slides as RBC trims rating

FTSE 100 watch: Sainsbury’s props up Footsie after Asda deal

The UK benchmark index has advanced in today’s session, following an upbeat from Asia and a boost by J Sainsbury (LON:SBRY) which agreed a merger deal with Walmart’s Asda. Glencore (LON:GLEN) meanwhile has fallen deep into the red following a rating downgrade at RBC Capital Markets.

Sainsbury’s lifts Footsie

As of 12:06 BST, the Footsie had added 35.80 points to stand 0.48 percent higher at 7,538.01. The blue-chip index has received a lift from Sainsbury’s, whose shares have spiked 17.11 percent to 315.95p, after the blue-chip grocer announced plans to merge with Walmart’s Asda, against the background of stiff competition in the UK grocery market.

“The merger, if successful, creates a retail giant in the UK with enough procurement and distribution scale to dominate food retail and challenge Amazon in non-food,” said Berenberg analysts, as quoted by Reuters. Shares in FTSE 100 rival Tesco (LON:TSCO) are currently standing 0.29 percent lower at 237.40p after losing about one percent earlier in the session.

WPP (LON:WPP) has been another prominent Footsie riser, having added 6.31 percent to 1,221.00p, with investors reacting positively to the ad giant’s results update.

Glencore share price dips

Shares in Glencore meanwhile have been sold off after freezing orders on the miner’s two Democratic Republic of Congo assets prompted RBC to lower its rating on the stock from ‘top pick’ to ‘outperform’.

“Although we reduce recommendation and target price, our analysis suggests there is already a substantial amount of DRC risk in the price,” the analysts explained, as quoted by Proactive Investors. Glencore’s share price is currently 3.33 percent worse off at 356.70p.

The FTSE 100 was 0.37 percent up at 7,529.61 points as of 12:33 BST on Monday, 30 April 2018.

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