London Stock Exchange
London's main market struggled for direction despite Tesco's surprise swoop for Booker Reuters

Blue chip shares struggled for direction in afternoon trading despite Tesco's surprise swoop for Booker, the country's largest food wholesaler.

The UK's largest supermarket said it had agreed a £3.7bn deal to buy Booker, which sells everything from baked beans to PG Tips to 700,000 small businesses, including convenience stores, grocers, pubs and restaurants.

The FTSE 100 Index lifted 17 points to 7178.4, as the deal was welcomed as an important step in Tesco's recovery. It posted the biggest loss in its history following a £326m accounting scandal three years ago. The FTSE 250 lifted 25.8 points to 18168.4.

Shares in Tesco were the best performer in the top flight lifting 11% after chief executive Dave Lewis said the move will "enhance Tesco's growth prospects by creating the UK's leading food business with combined expertise in retail, wholesale, supply chain and digital".

IG chief market analyst Chris Beauchamp added: "The regulator is bound to take an interest, with store disposals likely, but this is just the kind of news to finally reverse the serial underperformance in Tesco shares, which have suffered far more than Sainsbury's or Morrisons over the past few years."

Tesco lifted 20.6p to 209.6p, while shares in FTSE 250-listed Booker jumped 19%, or 34.4p to 217.5p.

The biggest afternoon risers in the FTSE 100 Index were Tesco (+20.6p to 209.6p), International Airlines Group (+14.3p to 505.5p), Fresnillo (+32p to 1404p), Smurfit Kappa (+38p to2094p), Convatec Group (+4.1p to245.8p).

The biggest afternoon fallers in the FTSE 100 Index were Antofagasta (-17.5p to 819.5p), EasyJet (-19p to 976p), Ashtead Group (-27p to 1622p), AstraZeneca (-67p to 4231p) and Intertek Group (-48p to 3428p).

The biggest afternoon risers in the FTSE 250 Index were Booker (34.4p to 217.5p), Acacia Mining (+17.6p to 411.7p), Centamin (+5.3p to 148.7p), Zoopla Property Group (+11.5p to 361.7p) and Ferrexpo (+3.4p to 143.6p).

The biggest afternoon fallers in the FTSE 250 Index were Nostrum Oil & Gas (-22.2p to 447.4p), Restaurant Group (-9.1p to 284.6p), Berendsen (-23.5p to 832.5p), Carillion (-5.8p to 221.5p) and Petra Diamonds (-3.8p to148.3p).