Market Report: Biomass subsidies give Drax new burst of energy

Analysts may have seen new proposed subsidies for biomass announced yesterday as merely a "mild positive" for Drax, but investors clearly felt differently as the power station operator shot up more than 10 per cent. The group closed at the top of the mid-tier index leaderboard, even though its chief executive attacked the measures for not going far enough.

If introduced, the plans would represent a significant increase in support for the use of eco-friendly biomass to generate energy, which Drax plans to invest heavily in. Yet this did not stop the company's boss Dorothy Thompson calling for a further "moderate uplift to maximise our potential for producing this low cost renewable electricity".

Meanwhile, analysts from Deutsche Bank were rather underwhelmed, saying the announcement was just "a mild positive" and a "starting point" for Drax. Nonetheless investors, who have been scared off recently by fears over the future viability of biomass, disagreed and pushed the company up 49.2p to 529p.

As Sunday's key EU summit drew closer, the appearance of further disagreements between leaders as they attempt to solve the eurozone debt crisis pushed the FTSE 100 back 65.81 points to 5,384.68. With talks between Merkel and Sarkozy stalling and signs of conflict emerging between the European Union and the International Monetary Fund over the next batch of aid for Greece, Lloyds dropped 1.5p to 31.65p while Royal Bank of Scotland was pegged back 0.84p to 23.63p.

The heavyweight diggers were also dragging the top-tier index down, with Kazakhmys and Antofagasta retreating 44p to 830.5p and 37p to 1,039p respectively. Also behind was ITV, which slipped 2.85p to 58.75p as traders blamed a tough outlook for advertising following reports claiming the X Factor broadcaster could be hit by a revenue slowdown over the next two months.

Those unhappy about G4S's announcement on Monday that it is buying Danish group ISS in a deal worth £5.2bn were given some hope after major shareholder Parvus Asset Management said it would vote against the acquisition. In response, the security services company – which has lost nearly 15 per cent this week – was lifted 7.4p to 241p despite Collins Stewart downgrading its rating to "sell" from "hold".

Unilever managed to outperform most of its fellow blue-chip stocks, with the PG Tips owner easing back 6p to 2,069p. The consumer goods behemoth was helped by positive results from Swiss chocolate maker Nestle, which increased its sales forecast for the year.

The prospect of a 50 per cent profits increase persuaded some to take a flutter on Betfair, as the online gambling group was bumped up 18.5p to 745p on the FTSE 250. Numis Securities' Ivor Jones suggested its new fixed odds sportsbook, which will be introduced from next April, has the potential to provide just such a boost, claiming its "potentially game changing impact... may have been overlooked."

After Home Retail revealed a 70 per cent drop in its first-half profits on Wednesday, analysts were scrambling to stick the boot into the Argos owner. Among them was Liberum Capital's Simon Irwin, who played down hopes the group's fall to a record low could prompt a bidder to appear.

Despite constant takeover rumours, with the latest wild speculation claiming an approach may come from Amazon, Mr Irwin said Home Retail held "little attraction to potential buyers" and that there were "limited synergies with mass merchants, particularly in apparel".

In the end, the company still managed to bounce 3.92 per cent, although it remained nearly 14 per cent lower than before its results.

It was a cheerful day for the retailers in general after the latest data from the ONS showed a surprise 0.6 per cent rise in sales. It certainly helped Marks & Spencer, which climbed 3.7p to 332.6p, while Next ticked up 74p to 2,614p.

Elsewhere, a profits warning from set-top box maker Pace – which it blamed on flooding suffered by its supplier Western Digital in Thailand – saw it plummet 13.04 per cent to 80p and finish at the foot of the mid-tier index.

The announcement of a major natural gas find off the coast of Mozambique by Italian oil giant Eni saw Cove Energy spurt up 7p, or 8.64 per cent, to 88p. The AIM-listed explorer has had its own recent success in the area, and RBS said the latest find "would add a significant critical mass of resources to support a large scale LNG development in the region".

The technology group Cap-XX enjoyed a massive advance of 67.57 per cent to 15.5p, prompted by its Japanese partner Murata starting mass production on their new "supercapacitor" device, which delivers quick bursts of power in products such as smartphones.

Life and Style
life
News
Brad Pitt and Angelina Jolie reportedly married in secret on Saturday
peopleSpokesperson for couple confirms they tied the knot on Saturday after almost a decade together
Life and Style
Chen Mao recovers in BK Hospital, Seoul
health
News
Joan Rivers has reportedly been hospitalised after she stopped breathing during surgery
people81-year-old 'stopped breathing' during vocal chord surgery
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
tv
News
i100
Arts and Entertainment
Diana from the Great British Bake Off 2014
tvProducers confirm contestant left because of illness
Arts and Entertainment
Lisa Kudrow, Courtney Cox and Jennifer Anniston reunite for a mini Friends sketch on Jimmy Kimmel Live
tv
Life and Style
fashion

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

Client-Side web developer (JQuery, Javascript, UI, JMX, FIX)

Negotiable: Harrington Starr: Client-Side web developer (JQuery, Javascript, U...

Structured Finance

Highly Competitive Salary: Austen Lloyd: CITY - An excellent new instruction w...

SQL Server Developer

£500 per day: Harrington Starr: SQL Server Developer SQL, PHP, C#, Real Time,...

C#.NET Developer

£600 per day: Harrington Starr: C#.NET Developer C#, Win Forms, WPF, WCF, MVVM...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone