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
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones