LONDON (Thomson Financial) - London shares were higher by midmorning, in a volatile session, with supermarket group Morrisons higher after strong sales figures for the third quarter.

At 10.23 am, the FTSE 100 index was 21.8 points up at 6,092.7, having been as high as 6,106.9 and as low as 6,026.9. The FTSE 250 index was down 6.6 points at 10,206.3.

The market will not get any direction from the US today, with Wall Street, where shares fell sharply again yesterday, closed for the Thanksgiving Day holiday.

Volume was average, with 507 mln shares changing hands in 175,660 deals.

Supermarket group Wm.Morrison retained its position as the top FTSE 100 riser midmorning, up 12-1/2 pence at 283-1/2 after a trading statement.

The firm said it has made an encouraging start to the second half with like-for-like sales for 14 weeks to Nov 4 up 3.7 pct excluding fuel and new store openings, ahead of market expectations

Citigroup repeated its 'buy' rating and a 350 pence price target on Morrisons and said the numbers were a touch ahead of consensus.

Other supermarket blue chips were pushed higher, with Tesco adding 7-3/4 pence at 470-3/4, while Sainsbury gained 1-1/4 pence at 408-3/4.

However, not all retailers were so fortunate.

Midcap Sports Direct shares dropped back after issuing its third profit earning of the year, losing 18-1/2 pence at 94-1/2, less than a third of February's 300 pence flotation price.

The discount sportswear retailer controlled by billionaire Mike Ashley, blamed the warning on England's failure to qualify for the finals of Euro 2008 following last nights defeat at Wembley by Croatia.

Fellow sporting goods retailer JJB Sports, which has already estimated the likely profit hit from England's qualification failure at between 4-8 mln stg, shed 2-1/2 pence at 143-1/4.

Comet owner Kesa Electricals was 13 pence to 226 after its Q3 results failed to impress with like-for-like sales up 3.0 pct in local currency, slightly below analysts' expectations for a 3.2 pct increase, and down from 3.9 pct in Q2.

This dragged FTSE 100 rival DSG International, owner of Currys and PC World, to yet another 12-month low of 102.8 pence, down 4.2, making it the biggest FTSE 100 faller.

Halfords also fell back, losing 12-1/4 pence at 291-1/4 as its interim results just meant analysts' expectations.

For the 26 weeks to Sept 28 2007 the group made a profit before tax and exceptional items of 47.6 mln stg. This compares with analysts forecasts of about 47 mln stg and 43.5 mln stg in the same period last year.

In broker-related moves, shares in British Energy and midcap Drax Group were outperforming in early trade after Goldman Sachs upped its price targets and profit estimates for the companies.

Partly on the back of higher oil prices expected over the coming months and years, Goldman upped its price target for BE to 716 pence from 682 pence.

The shares edged up 5-3/4 to 464-1/2. Shares in Drax were up 24 pence at 685 pence.

Drugs giant GlaxoSmithKline was up 58 pence at 1,218 following yesterday's acquisition of Reliant.

Elsewhere, heavyweight blue chip miners also beat a retreat impacted by lower commodity prices and fears over the global economy, with Xstrata down 105 pence at 2,844, Antofagasta off 17-1/2 pence at 638-1/2, and Vedanta Resources down 64 pence at 1,862.

Kazakhmys was down 34 pence at 1,220, impacted as well after Oleg Novachuk, the chief executive of the Kazakh copper miner, gave a downbeat view on the group's earnings and production for the year yesterday.

And further falls in hard-pressed banking issues also soured blue chip sentiment as worries over the impact of the global credit crunch persist, with RBS shedding 7-1/4 pence at 390, HBOS off 8 pence at 705, and Northern Rock down a further 2.5 pence at 82.3 with the future of the stricken mortgage lender remaining in doubt.

Elsewhere, pubs operator Mitchells & Butlers lost 12-1/2 pence at 594 after being downgraded to 'equal-weight' from 'overweight' by Morgan Stanley this morning, with a reduced price target of 700 pence from 850.

Morgan Stanley said it thinks the prospect of a successful JV deal is fading and an alternative REIT demerger would add significantly less value.

Royal Dutch Shell was down 16 at 1,987, reflecting profit-taking after gains yesterday as the crude price eased slightly. BP was down 4 pence at 573-1/2. Oil prices are still relatively high with Brent for January delivery just above 95 usd.

Tullow Oil was 8-1/2 lower at 572-1/2 after plugging and abandoning a well in Gabon. Deutsche Bank said this lowered Tullow's net asset value by 6 pence.

Elsewhere British Airways shares added 4-3/4 pence at 327-1/2, benefiting from a slight easing in crude prices, a positive read-across from Air France-KLM results, and expectations for government approval today of plans to build a third runway at London's Heathrow airport.

And Centrica took on 8-1/4 pence at 344-1/2 as ABN Amro upgraded its stance to 'buy' from 'hold' and as ING initiated coverage on the gas distributor with a 'buy' stance today.

Back on the second line, Paragon shares rallied after a slump over the past few sessions after the mortgage lender revealed rights issue and dividend concerns on Tuesday, adding 13 pence at 93.

KBC Peel Hunt upgraded its stance for Paragon to 'buy' from 'sell' today, with a target price of 122 pence.

Elsewhere, Galiform benefited from an upbeat trading statement, taking on 4-1/2 pence at 99.

Galiform said it expects its full-year performance to be in line with its forecasts as trading has continued on track, with the improved sales of its Howden Joinery business evident in the summer continuing throughout the autumn.

Expansion moves lifted Northern Foods shares 3-3/4 pence higher to 90, with the firm buying Ethnic Cuisine for an undisclosed cash sum.
Away from retailers, shares in Imperial Energy dropped 156 pence, or 13 pct, to 1,040 after the said talks with Gazprom have ended without an agreement over proposals for the Russian firm to acquire a 25 pct stake in the UK group.

And an unexciting trading update saw BRIT Insurance shares shed 5 pence at 257-1/4. brian.gorman@thomson.com btg/ajb

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