OPEC glut drags oil shares down
OIL and mining stocks dragged London’s top flight lower yesterday amid Us economic growth jitters and falling crude and commodity prices.
The FTSE100 index, which topped 7000 earlier in the session, lost hold of the gains to close 12.55 points adrift at 6960.49.
BP was 4.4p off at 452.4p and Royal Dutch Shell fell 29p to 2026p as oil prices fell on renewed worries of a supply glut. The International Energy Agency said Middle East oil cartel OPEC is pumping at least two million barrels of oil a day more than needed.
Miners were also in the dumps as prices of copper and most other industrial metals dropped on a firmer dollar.
Glencore declined 5.4p to 293.3p, Anglo American lost 20p to 1090.5p, BHP Billiton crumbled 16p to 1533p and Rio Tinto dimmed 24.5p to 2930.5p.
Us industrial production fell for a fifth straight month in April while a sharp drop in American consumer sentiment in early May also hit spirits.
James Butterfill, global equity strategist at Coutts, said: ‘The market believes there is more to worry about given that recent Us data is continuing to miss expectations.’
News that sportingbet owner GVC holdings had bid for online bookmaker Bwin. Party Digital Entertainment sent the latter’s shares flying, gaining 10.05p to 99.45p.
Bwin said it had received the proposal from GVC and was continuing discussions with a number of interested parties.
‘There can be no guarantee that these discussions will result in any transaction being completed and a further update will be given in due course,’ it said.
Coca-Cola HBC rose in early deals after it said it was ‘encouraged’ by trading in its first quarter. But the gains lost their fizz, leaving the drink bottler 25p off at 1391p. Volumes rose, helped in part by a good performance in Nigeria and eastern Europe.
Investors switched on to broadcaster ITV by 4.7p to 262p after upgrades from JP Morgan and Bernstein, with Barclays also raising its target price on the stock despite cutting it to ‘neutral’ from ‘overweight’.
‘We continue to see ITV as a well-managed company that execute their business plan very well but feel there should be a better opportunity to buy the shares,’ analysts at Barclays said in a note.
Investors evacuated smoke and carbon monoxide alarm maker Sprue Aegis by 2.5p to 282.5p – it said it did not expect sales from a new distribution deal to be significant.
A half-year profit warning from Brammer knocked shares in the distributor of industrial maintenance, repair and overhaul products down by 76p to 329p. Brammer blamed testing market conditions and foreign exchange headwinds.
Education management software group Tribal reversed 5.5p to 144.75p after saying its 2015 profits would be weighted towards the second half as a result of contract completion delays.
Baron Oil jumped 0.05p to 1.18p as the explorer signed a seismic study contract for a block in north-west Peru. Capital Drilling was flat at 26.25p after reporting higher quarterly revenue and contract wins.
Us explorer and producer Caza Oil & Gas leaked 0.75p to 3.88p as it blamed falling oil and gas prices for a 27pc fall in revenue in the three months to the end of March.
shares in Enquest slipped 0.75p to 55.75p amid news of declining quarterly year- onyear production at the North sea oil and gas group’s Thistle field, after a strong performance in the same period last year.
Another North sea oil operator, Ithaca Energy, weakened 0.75p to 57.25p after first quarter results on Thursday. But broker Investec kept its buy recommendation, high- lighting the company’s confirmation in the results that its stella oil project would start producing oil and gas in the second quarter of 2016.
Boardroom buying boosted shares in mining royalty group Anglo Pacific, which has operations in Australia, Canada and Latin America, by 1.5p to 99.25p.
Ambrian lost 0.25p to 11.25p as the company reported delays in the construction of a cement plant in Mozambique.
Elsewhere, investors gobbled up shares in Richoux Group by 2p to 21.5p as the restaurant owner and operator served up higher annual turnover and profits.
Document management group Restore backtracked 3p to 269p as it reported satisfactory trading in both of its divisions, but said lower resale prices spoiled the positive impact of higher IT recycling volumes.
Robot technology group Rex Bionics shares stayed at 61p despite new distribution agreements in Denmark and Benelux countries. ÷ INVESTORS built stakes in MJ Gleeson yesterday as the urban regeneration and construction specialist flagged up a 12pc rise in sales and said annual profits could top hopes. Gleeson, which has a northern England-based low-cost housing business and a southern England land development business, forecast a 30pc rise on home deals. Shares closed 19p up at 407.5p.