Sector movers: Supermarket stocks advance as Morrisons shares jump

6th Nov 2014 14:30

Supermarket shares surged on Thursday after third-quarter results from Wm Morrison were warmly-received, sending the food and drug retail sector firmly to the top of the pile on London's stock market.Morrisons' share price was up 7.6% at 174.8p in afternoon trade after the company reported improving sales trends in the three months to 2 November, as it expressed confidence in the recent launch of its 'Match & More' card scheme.Rival grocery stock J Sainsbury also jumped around 7%, while Tesco added 4%.Like-for-like (LFL) sales growth was still negative at Morrisons, down 6.3% on the same period last year, but better than the 7.4% decline seen in the first half of the year. The 2.4% fall in items per basket also marked an improvement on the 3.2% drop in the second quarter.The group said that Match & More - the points card which provides a price guarantee against discounters Aldi and Lidl, as well Sainsbury's, Tesco and Walmart-owned Asda - is "already proving extremely popular with customers".Analyst Sam Hart from Charles Stanley said that trading conditions in UK food retail are expected to remain "extremely challenging" in 2015, with constrained household budgets and the aggressive expansion of Aldi and Lidl. However, he said that he is "encouraged" by the progress Morrisons has made so far."Our confidence is growing that 2014/15 may represent the earnings trough, but visibility on the extent of any rebound in earnings in subsequent years is minimal," he said.Sainsbury's was also making headlines on Thursday after its joint venture with Danish group Danske, Netto, made its return to the UK for the first time since Danske's UK operations were bought by Asda in 2010. An initial store in Leeds will be followed by four more openings by the end of November and a further 10 by the end of 2015.Sainsbury's own second-quarter results are due out next Wednesday, in which the company should reveal the hotly-anticipated outcome of a strategic review by management."Any signs that the company is likely to participate in the growing price war in the sector will also be of interest," said Sheridan Admans from The Share Centre.Top performing sectors so far todayFood & Drug Retailers 2,707.89 +4.52%Oil Equipment, Services & Distribution 21,216.65 +2.87%Industrial Metals & Mining 1,312.32 +2.51%General Industrials 3,950.41 +1.68%Aerospace and Defence 4,633.50 +1.35%Bottom performing sectors so far todayInsurance (non-life) 1,867.30 -1.52%Pharmaceuticals & Biotechnology 12,671.92 -1.12%Real Estate Investment Trusts 2,950.72 -0.63%Forestry & Paper 11,417.64 -0.56%Health Care Equipment & Services 6,050.96 -0.54%