Market Report: Footsie ends on a high but Cairn Energy misses out


It may have been boom time in the Square Mile, but not everyone was along for the ride. While the Footsie closed last night at its highest since last July, Cairn Energy was among the stocks missing out on the rally amid fears the oil explorer is about to come under sustained pressure.

The group – which has faced heavy fire from Greenpeace for its controversial, and so far unsuccessful, drilling programme in Greenland – is trading ex-dividend on Monday for the $3.5bn, or 160p a share, it is returning to shareholders following the sale of part of its Cairn India stake.

However, UBS warned yesterday that this is one of just a number of hurdles on the horizon. Cairn is also being kicked out of the MSCI World benchmark index on the same day, a move which the broker calculated will spark the selling of nearly 70m shares – the equivalent of 11 days' volume.

If that was not enough, Cairn looks set to be relegated from the top-tier index in next month's reshuffle of the London indices, and the scribblers predicted this will result in another trading day's worth of shares being sold.

UBS analyst Melanie Savage said this "significant selling pressure" was "likely to lead to near term downside to the shares". Although she pointed out its valuation may be attractive "once the dust has settled", she added that the story for the year ahead appears "fairly slow-burning". As a result, Cairn spent most of the day in the red, and although it managed to close 1.8p ahead at 288.8p, it still lagged behind the vast majority of its fellow blue-chip stocks.

It was not a good session for the oil groups in general, with BG sliding 7p to 1,425p as traders cited concerns that next Thursday's full-year results could be accompanied by a possible fund-raising, although analysts have recently played down the likelihood of this being required.

Overall, there was no stopping the FTSE 100. Mightily impressive jobs data from the US left the benchmark index 105 points better off at 5,901.07 – a level it has not seen since last July before a run of awful economic news resulted in it losing almost 10 per cent in just five days. With data from the UK and China also helping yesterday, the Footsie has now managed to gain over 300 points this year alone, although not everyone was so optimistic – "it will all end in tears," warned one trader.

Admiral drove up 7.9 per cent to 1,038p after extending its UK car reinsurance partnerships at no increase to costs. The insurer has been rather quiet since November's profits warning, so the news was being taken as particularly reassuring, as was a positive update from reinsurance giant Munich Re's on Thursday.

Elsewhere, Old Mutual climbed 6.3p to 157.8p after the financial conglomerate announced a special £1bn dividend, while Glencore (up 20.85p to 482.55p) and Xstrata (up 52.5p to 1,283p) were still on the rise following Thursday's announcement of merger talks between the two. International Power, which finished 3.5p better off at 343.8p, was the subject of vague speculation that France's GDF Suez may want to snap up the remaining 30 per cent of the utility it does not already have, although takeover rules mean it will have to wait a while.

Down on the FTSE 250, Tui Travel was lifted 8.6p to 207.3p amid talk its parent company Tui AG is getting closer to selling a chunk of its stake in the Hapag-Lloyd shipping line. There has been constant speculation that a disposal of the holding would be a step towards the German company moving for the 45.5 per cent of Tui Travel it does not already own.

Although Misys initially fell after revealing it was discussing an all-share merger with Swiss peer Temenos, by the bell the software group was 4p better off at 329.5p. Market gossips refused to give up on the idea that US firm FIS – which abandoned a £1.4 billion bid back in August – could have another go, while recent vague speculation has suggested there could be possible private equity interest.

Traders noted that, following the Misys and Xstrata announcements this week, a number of other stocks which have been recently the subject of takeover rumours were on the rise as well. Argos owner Home Retail and engineer Invensys ticked up 6.8p to 117.1p and 9.9p to 212.8p respectively, while Hays was lifted 5.8p to 85.75p despite dealers playing down the revival of speculation earlier in the week that the recruiter could be a target for Swiss giant Adecco.

Game Group was feeling rather relieved after the struggling computers games retailer – which powered up 24.58 per cent to 6.64p – managed to strike a deal with its banks to keep it operating.

Punters were piling into Worldlink after the mobile data group announced it had received an approach . The news of discussions with the US company One Media Technology over a possible takeover saw the group surge up 70.83 per cent to 41p.

Start your day with The Independent, sign up for daily news emails
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Arts and Entertainment
L to R: Hawkeye (Jeremy Renner), Captain America (Chris Evans) & Black Widow (Scarlett Johansson) in Avengers Assemble
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Suite dreams: the JW Marriott in Venice
travelChic new hotels in 2015
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
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

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

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015
Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall