Oil strikes fuel excitement for BP and BG shares

MARKET REPORT

There is nothing like old-fashioned oil strikes to fuel stock market excitement. Shares of BG, the old British Gas, have enjoyed a powerful run on finds, real and rumoured, and yesterday it was the turn of British Petroleum, up 21.5p to 859p, to hit the high road on a discovery off Angola.

BP, suing pressure group Greenpeace for pounds 1.4m, is part of a consortium headed by Elf Aquitaine. According to the French group, the well has tested a cumulative flow rate of 16,000 barrels a day.

BG, 1.5p higher at 254p, was riding at a peak until last week's slump. The market had been excited by oil and gas finds off Trinidad, in the North Sea and off-shore Egypt.

The once-ailing gas group is rumoured to have struck it rich in Indonesia but drilling there continues and any development before the middle of next month is unlikely.

The group, clearly enjoying its status as an increasingly influential oil and gas explorer, kept up the momentum by disclosing Texaco had taken a 20 per cent interest in its potentially rich Kazakhstan field which it runs with ENI, the Italian energy giant.

NatWest Securities believes BG is still a buy, despite its strong display in the past few months. It upgraded its asset valuation from 240p to 280p.

Interim figures, the first since the Centrica demerger, are due next month. A share buyback and sale of underperforming assets may be on the agenda, says NatWest which also repeated its buy advice on Shell, up 14p at 430.5p.

The rest of the market staged an impressive rally. Footsie opened in determined style with a 43.3-point jump and went on to close with a 79.2 gain to 4,914.2.

Financials and drugs, two sectors behind this year's Footsie push, led the comeback.

HSBC, the banking giant, ignored the Hong Kong share retreat as Dresdner Kleinwort Benson gave a 79.5p push to 2,176.5p by emphasising its 2,600p target. There was talk HSBC, known to be seeking acquisitions and consequently linked with an array of available banks, had set its sights on Commerzbank, the German group.

Other financials to move ahead included Standard Chartered, another with Hong Kong exposure, up 47.5p to 1,044p.

The Hong Kong nerves were, however, reflected in some of the specialist Far Eastern investment trusts with Fleming Far Eastern off 6p to 298.5p.

Barclays, up 11p to 1,393.5p, enjoyed a modest buyback excursion, picking up 1 million shares at 1,386.76p.

Hambros, the under-pressure merchant bank, rose 10p to 227.5p. It turned down a bid from Fishers International, the Irish financial group little changed at 18.5p, for its controlling interest in Hambros Insurance Services, up 1p at 95p.

Drugs rose on the back of US interest with Glaxo Wellcome 36p higher to 1,231.5p and Zeneca 52p to 1,942p.

British Aerospace ignored an SBC Warburg buy (1,700p target), softening 3p to 1,446p. Warburg had better luck with engineer FKI, up 2p to 197p; it suggested a 230p price.

Allied Domecq frothed 11p to 479.5p on an ABN Amro Hoare Govett forecast of a 10 per cent upside and expectations other investment houses will adopt a more positive tone.

WH Smith, the newsagent, hardened 16.5p to 375.5p on a Cazenove push and talk of corporate action with speculation stretching from a break- up to a Tesco bid.

Laura Ashley looked more threadbare, off 1p to 55.5p following its latest setback.

MFI, the furniture chain, firmed 4p to 159p with Hoare saying the shares were undervalued.

Southern Electric, the only electricity distributor to avoid a bid, improved 5p to 454p on Societe Generale Strauss Turnbull support.

Sears, where arch bears PDFM lifted its stake to 20.6 per cent, held at 62p. Nikko, the investment house, has a sell sign over the shares.

It believes the struggling retailing group "will be lucky" to produce a half-year profit and points out there are market worries whether the dividend will be held.

Year's profits are expected to be pounds 50m before exceptionals against pounds 140.2m in 1995.

Asks the securities house: "Who wants to be left holding the rump once Freemans is sold and Selfridges demerged?"

Kenwood, the kitchen appliance group, recovered most of Monday's fall after rival Pifco let it be known it still hovered and had not given up hopes of bidding.

The shares rose 11.5p to 115p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Sport
tennisLive: Follow all the updates from Melbourne as Murray faces Czech Tomas Berdych in the semi-final
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
Arts and Entertainment
Taylor Swift is applying to trademark song lyrics from 1989
musicYou'll have to ask Taylor Swift first
PROMOTED VIDEO
News
Joel Grey, now 82, won several awards for his role in Cabaret
people
Sport
Harry Kane celebrates scoring the opening goal for Spurs
footballLive: All the latest transfer news as deadline day looms
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness