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Tesco (TSCO) shares rose almost 10% yesterday to reach their highest point since August 2015 after strong half year results showed Dave Lewis’ turnaround plan is on track.

The shares rose Tesco 9.75% during the day to close at 207.1p, having hit as high as 214.85p during the day.

The shares are now 22.2% up just over the past month and hit a low of 137p in January 2016.

Yesterday Tesco reported its third consective quarter of like-for-like growth with UK sales up 0.9% like for like in the second quarter. This marked an acceleration of growth from 0.3% like for like growth in the first quarter and took first half like for like growth to 0.6%.

Total first half sales were up 3.3% to £24.4bn, with profit expectations for the year on track.

The one blot on Tesco’s rosy outlook was a dramatic widening of its pension deficit, which rose from £3.2bn in February to £5.9bn due to falling bond yields after the UK voted to leave the European Union.

See The Grocer’s analysis of Tesco’s results here.

Morning update

After a hectic morning yesterday, this morning is a rare quiet morning for the grocery sector with no news on the market of note.

The FTSE 100 has opened flat at 7,030.8pts this morning.

Some of the air has been squeezed out of Tesco’s bubble as fears grow over the depth of its pensions deficit. The supermarket has fallen back 1.9% so far this morning to 203.2p, while Marks & Spencer (MKS) is down 1.5% to 332.5p and Sainsbury’s (SBRY) down another 1.3% to 245p.

Strong risers this morning include Hotel Chocolat (HOTC) up 2.6% to 238.5p and bouncing back from yesterday PayPoint (PAY), up 1.8% to 1,063p and Fevertree Drinks (FEVR) up 1% to 969.5p.

Yesterday in the City

Tesco was the FTSE’s outstanding performer yesterday, but elsewhere UK shares retreated from their 18-month highs.

The FTSE 100 closed yesterday 0.6% down to 7,033.2pts despite the pound dipping below $1.27 for the first time since 1985.

The weaker pound has helped to drive up the FTSE 100, most of which make significant revenues outside the UK. But UK shares were down yesterday on concerns that the European Central Bank may slow down the pace of its bond buying programme.

Most supermarkets were lifted by Tesco’s trading momentum. Morrisons was up 1.1% to 22p, Marks & Spencer 2.7% up to 337.7p and Ocado up 0.8% to 265.1p. The major exception was Tesco’s chief rival Sainsbury’s, which fell 0.8% to 248.3p yesterday.

Elsewhere, many of those internationally focussed companies that have been boosted so far this week by the weakening pound fell back yesterday.

Imperial Brands (IMB) was down 3.4% to 3,953p, British American Tobacco (BATS), down 3.2% to 4,881p Reckitt Benckiser (RB) was down 2.2% to 7,237p, Diageo was 2.1% down to 2,220.5p and Unilever was 2% down to 3,688.5p.

Other major fallers included Compass Group (XXX), 3.3% down to 1,497p, WH Smith (SMWH), down 2.3% to 1,544p, Booker (BOK) down 2.3% to 181.9p. Heavy falls were also seen at PayPoint (PAY), down 6.2% to 1,044p and Fevetree Drinks (FEVR), down 3.6% to 959.5p.

Amongst the other few risers were Premier Foods, up 2.8% to 54.8p and Majestic Wine (WINE), up 4.7% back to 306p.