Power shares surge as firms avoid windfall tax

ElEctricity firms surged after Boris Johnson said the Government had no plans to hit the sector with a windfall tax.

A similar levy on oil and gas firms was announced earlier this year after profits in the industry boomed as a result of soaring energy prices following the russian invasion of Ukraine.

it had previously been suggested that the measure could be extended to the UK’s electricity generators, who have also cashed in on a surge in household energy bills. But a spokesman for the Prime Minister told reporters there were ‘no plans’ to introduce a windfall tax on electricity firms after Johnson previously promised not to introduce any policies before exiting Downing Street.

the statement sparked a relief rally in the sector, with shares in British Gas-owner Centrica jumping 3.4pc, or 2.74p, to 82.82p in response. rivals also gained with SSE adding 3.1pc, or 52.5p, to 1746p and National Grid climbing 1.5pc, or 16p, to 1084.5p.

FtSE250 firm Drax Group, which operates a power plant in North yorkshire, bounced 6pc, or 39.5p, to 697p.

Prospects of a windfall tax on electricity generators had previously been criticised as jeopardising billions of pounds in investment in renewable energy, potentially kneecapping the UK’s efforts to cut down its greenhouse gas emissions.

While the electricity companies were booming, it was a different story for the oil and gas firms, which slipped into the red amid worries over the global economy.

Shell was down 0.6pc, or 13p, at 2030.5p and BP fell 0.5pc, or 1.95p, to 384.6p.

Harbour Energy was an outlier, however, rising 0.3pc, or 0.9p, to 326.6p after reporting its timpan1 exploration well had hit gas off the coast of indonesia.

the FTSE 100 scraped higher by 0.005pc, or 0.35 points, to 7196.59 and the FTSE 250 slipped 0.4pc, or 75.97 points, to 18836.98.

Mining stocks struggled amid escalating fears an economic downturn will hit demand for commodities amid sliding iron ore prices exacerbated by a slowdown in the chinese property sector.

Anglo American was down 3.5pc, or 100p, to 2724.5p, Antofagasta fell 4.1pc, or 46p, to 1067p, Glencore dropped 1.2pc, or 5.15p, to 426.2p and Rio Tinto eased 0.5pc, or 23.5p, to 4811.5p.

Jitters remain that the covid-19 nightmare may not be over as chinese officials re-introduced lockdown measures in six cities, including parts of Shanghai. ‘the latest crackdown has sent a cold chill across financial markets amid worries fresh supply chain issues and weakening demand will hit, just as hopes of recovery had crept up,’ said Hargreaves lansdown analyst Susannah Streeter. Gold firms were in the red as the yellow metal continued to languish near ten-month lows as hopes of aggressive interest rate hikes from the Federal reserve boosted the dollar, making the currency a more attractive haven for investors. the drop sent Endeavour Mining shares down 1.4pc, or 23p, to 1655p and Fresnillo shed 2.8pc, or 19.2p, to 664p.

Pet vaccine and medicine maker Dechra Pharma posted a 14pc rise in revenues for the year to the end of June as it was boosted by acquisitions and a ‘resilient’ market.

However, the shares slipped 3.1pc, or 116p, to 3634p after boss ian Page said the group’s revenue growth in its second half had slowed to ‘more normal levels’ as the boom in pet ownership during the pandemic began to subside.

Domino’s Pizza edged up 0.8pc, or 2.2p, to 290.6p after announcing that Edward Jamieson, former regional finance director for the UK & ireland at Just Eat (down 1.8pc, or 24.4p, at 1312.2p) will join in October as chief financial officer.