Market Report: Tesco boosted as Cantor adds it to shopping list

Tesco’s trading problems have been well trailed but one analyst yesterday decided it was worth having its shares in your basket.

Cantor Fitzgerald said “Tesco UK is 35 per cent undervalued compared with its UK peers”, and could be one of the few that will be successful in “recapturing the shifting customer base in retail” with its convenience stores and online where it is “growing ahead of the market”. Cantor raised its rating from sell to buy, with a 325p target. Tesco was one of the top risers on the Footsie, up 6.35p to 284.45p.

The wider market recovered its poise after a dire week last week, and the FTSE 100 lifted 55.97 points to 6,746.14.

The market was buoyed by M&A activity – Shire said it would recommend an improved $53bn takeover approach from US rival AbbVie and the drugs group soared 33p to 4,903p.

Mike Ashley’s Sports Direct announced a partnership with recently floated MySale to enter the Australian and New Zealand retail markets. Sports Direct will post its full-year results on Thursday and scored a 25p rise to 723p, topping the Footsie. MySale rose 4p to 214p.

Ryanair said it had no plans to cut its profit forecast this year despite warnings by rivals Air France-KLM and Lufthansa. But investors were nervous and budget airline rival EasyJet slipped 22p to 1,244p.

Off-licence group Conviviality Retail, owner of Wine Rack and Bargain Booze, reported its full-year results with a 31.5 per cent jump in pre-tax profit to £9.3m but total sales slipped 4.33 per cent to £355.7m and the shares eased 0.5p to 163p.

Under fire Aim-listed outsourcing group Quindell said first-half sales had more than doubled. Its shares took a battering earlier this year when US-based Gotham City Research questioned its sales model, claims that Quindell strongly denied. It rocketed more than 30 per cent, or 54.5p, to 235.5p after reporting a 117 per cent rise in first-half sales to £355m.

Miner Bullabulling will delist from Aim, having been taken over in a hostile bid by Norton Gold Fields. Its shares were unmoved at 4.12p.