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FTSE 100 down; supermarkets under pressure

Published: 08:04 21 May 2014 EDT

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After a flat start for Footsie, the UK benchmark was firmly down at the mid-day point, with supermarkets, not for the first time in recent months, under pressure.

Morrison (LON:MRW) was the biggest loser, down  2.54%, while Tesco (LON:TSCO) was the fourth biggest loser on the blue chip index, down 1.55%.

Morrisons has been downgraded to 'sell' by Deutsche Bank after a rally that has seen the share price rise 10% in the past two weeks.

It has out-performed Tesco by 3% and Sainsbury's  (on a total  return basis) by 1% over the same period -  gains that are not supported by news flow or fundamental valuation, said the broker.

FTSE 100 was down over 15 points at 6,787 at the time of writing.

The biggest gainer was Petrofac (LON:PFC), the oil services giant, which was boosted by a note from Barclays raising its stance to 'equal weight' from 'underweight'.

AstraZeneca (LON:AZN) was also in focus once more, with shares rising, as the 'will they or won't they' Saga bid story increases to gain column inches.

Sentiment may also be affected by details from the minutes of the last BoE meeting, showing some  on the committee are growing increasingly in favour of rising the bank rate from its current bargain basement levels.

In contrast, the mid-tier FTSE 250 was surging ahead, up 60.44, while FTSE AIM All-share gained 2.23 to 791,76 and FTSE AIM 100 added 19.11 to 3500.35.

In the small caps, there were several notable risers including SeaEnergy (LON:SEA), which added over 8% as it was awarded its first ship management contract.

The SEASM team will be responsible for the management of the crew, provisions and technical support of the MV Surf Ranger, which recently arrived in the UK sector of the North Sea after being acquired by a subsidiary of Otto Marine of Singapore.

Northcote Energy (LON:NCT) rose nearly 9% as it said it was to monetise additional gas associated with its oil production operations at the Zink Ranch property.

Gas flows have been on the rise at Zink Ranch since the first four of 14 planned well work-overs were completed.

One well alone, flowing around 60,000 cubic feet per day, doubles the property’s gas volumes at the time it was acquired by Northcote.

As the incremental gas production has not declined, Northcote now intends to installa gas compressor and associated infrastructure to monetise this increased gas production.

Wentworth Resources (LON:WRL) reminded investors today that the first of two potentially high impact exploration wells in Mozambique will get underway next month.

The Anadarko operated Tembo-1 well is a key catalyst for Wentworth, which is otherwise awaiting the completion of a gas pipeline to the north in Tanzania.

Drilling of the second well, Kifaru-1, will follow the completion of Tembo-1.

Shares rose 6.63%.

President Energy (LON:PPC) was boosted after chairman Peter Levine increased his stake in the company to 19.38%, with the purchase of 250,000 shares at a price of 30p each on May 20.

This topping up comes ahead of a hotly anticipated drill programme in Paraguay. Shares are trading, up over 5%, at 31.25p.

On the flipside, Summit (LON:SUMM) edged down 7.81% after it reported the preliminary results from the phase 1B clinical trial of SMT C1100, its treatment for Duchenne muscular dystrophy (DCM).

The company said the drug was safe and well tolerated, and patients saw a reduction in the enzyme associated with the wasting disease.

Another drug discovery firm in retreat was ImmuPharma (LON:IMM), down 8.25% after releasing its results for 2013. Investors might have been expecting news on a financing deal or partner agreement for the firm’s flagship compound, Lupuzor, but the group is still pondering its options.

The group ended 2013 with £5.4mln in cash, down from £8.9mln a year earlier, while it has yet to draw on the £50mln equity financing facility it signed with Darwin Strategic Limited in May of last year. The healthy cash position gives the company a lot of flexibility in terms of the development of Lupuzor, its treatment for Lupus.

E-procurement group cloudBuy (LON:CBUY) edged higher as it welcomed changes to the care system that will accompany a new bill passed by Parliament.

The company said the Care Act would mean several new spending initiatives that will help to drive up quality, increase transparency and transform spending – the most crucial aspect of the bill to the AIM-listed group.

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