London - A forecast-beating quarterly performance from supermarket chain Sainsbury's helped boost UK shares amid a broader market rebound on Wednesday, with Glencore also recovering from a painful sell-off.
There was also an acceleration in British house price growth in September, according to mortgage lender Nationwide, adding to evidence the housing market has regained momentum.
UK and European equities were, however, on track for their worst quarter since the euro zone crisis in 2011, with signs of an alarming slowdown in China and the prospect of an interest-rate increase in the US taking the wind out of a multi-year rally fueled by cheap central bank cash.
“People have been very quick to try and take risk off, but I think one good thing is that it has brought valuations back to a reasonable level,” Atif Latif, director of trading at Guardian Stockbrokers, said, adding that he thought the next quarter would see an improvement.
The FTSE 100 index was up 2.3 percent at 6 044.30 points at 1103 GMT, slightly underperforming the pan-European FTSEurofirst 300 index.
Sainsbury's was the top performer in the UK, up 13.5 percent and on track for its best one-day gain since 2007 after lifting its full-year profit forecast and raising hopes that the battered food-retail sector could be hitting the bottom.
Rival Morrisons was up 7.6 percent and Tesco up 6.2 percent.
“Sainsbury's is doing better than even they expected ... This is good news for the UK average basket size spend,” Bernstein analysts wrote in a note to clients.
Glencore extended its recovery after a 30-percent sell-off on Monday driven by fears it was not doing enough to cut its debt pile in the face of slumping metals prices. Its shares were up nearly 10 percent after the company said it had no solvency issues.
“We think the market's taken it as a crisis of confidence as opposed to anything else,” said Guardian Stockbrokers' Latif, adding the statement by Glencore's management and the defence of their balance sheet did seem to be reassuring.
Bid talk lifted electrical goods retailer Darty, up 16.4 percent after French books and music retailer Fnac said it had made a proposal to buy the company in a deal valuing it at 533 million pounds.
Worldwide mergers and acquisitions are close to a record and with interest rates still at rock-bottom, investors expect takeovers to buoy markets going forward despite extra volatility.
REUTERS