Market Report: Hopes the tough times are over see Weir on the rise

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The Independent Online

Is there light at the end of the tunnel for Weir Group? Events across the Atlantic have been knocking the pump manufacturer recently, prompting the stock to drop by around 25 per cent in just two months. Yesterday, however, the firm was attempting a rally amid claims the run of bad news is drawing to a close.

Weir has been pushed back by fears over its exposure to the North American shale gas industry as natural gas prices in the States have recently dropped to 10-year lows, with results from a number of US energy services groups hitting the engineer's share price.

However, now that most of the sector has reported their figures, UBS believes that the tough times have passed, with the broker's scribblers saying that a "lot of the negative catalysts... are done meaning the market should now start to concentrate on Weir itself".

The analysts were also getting excited on talk that Weir could be about to launch a number of new products, as they kept their "buy" recommendation and 2,500p-a-share price target, helping the group surge up 60p to 1,720p

Although economic data out of the US was rather mixed, the FTSE 100 managed to finish 29.83 points stronger at 5,748.72, its third straight session ahead.

This was largely thanks to a number of positively received results such as those from Costa Coffee-owner Whitbread, which perked up 112p to 1,921p on the release of its full-year figures.

A number of the energy groups were boosted by first-quarter numbers from Royal Dutch Shell (77.5p higher at 2,266.5p), with BP and BG Group up 11.95p to 444.25p and 18.5p to 1,430.5p respectively.

Meanwhile, mid-tier oil group Cairn Energy rose 4p to 338p as traders highlighted the revival of speculation it could get rid of the rest of its shares in Cairn India, having recently sold a controlling stake in the business to Vedanta Resources (5p lower at 1,220p).

Back on the Footsie, it was certainly a mixed day for the pharmaceuticals groups. While Shire ticked up 38p to 2,040p after the drug maker's earnings for the first three months of the year narrowly beat forecasts, AstraZeneca was not so lucky.

It closed in last place, sliding 174.5p to 2,666.5p, as it announced the resignation of its boss David Brennan at the same time as first-quarter results that fell short of the Square Mile's expectations.

Down on the FTSE 250, a late rally saw CSR charge up 9.4p to 210.6p.

The move was accompanied by reheated takeover rumours, with the vague speculation suggesting the chip designer could be a target for US firm Texas Instruments, although City voices were playing down the whispers.

At the same time, Liberum Capital retained its "buy" advice ahead of CSR's first-quarter results next week, whilealso claiming that the group "is in a position to announce further more aggressive buybacks".

TeleCity closed at an all-time high, shifting up 24p to 813p, after results from Stateside rival Equinix earlier in the week beat Wall Street's forecasts.

Espirito Santo, which reiterated Telecity's "buy" rating, said the figures showed that "the supply demand environment remains favourable", although it was not enough to persuade Liberum Capital's William Shirley to change his "sell" recommendation.

EnQuest spurted up 1.7p to 123.7p after announcing it was once again raising its stake in the Kraken discovery, bringing its interest in the North Sea field to 60 per cent, with Fox Davies saying it showed "management's enthusiasm about the quality and potential of the asset".

Following the announcement from Omega Insurance (4.5p stronger at 65.5p) late on Wednesday that it had agreed to be bought by peer Canopius for 67p a share, analysts were talking up the likelihood of Novae being the next among the Lloyd's of London insurers to receive a takeover approach.

Pointing out that the group – which itself was at one point interested in a possible move for Omega – is the "last small-cap listed player standing", Peel Hunt's Sarah Lewandowski claimed an approach "wouldn't be surprising if the valuation doesn't catch up with its enhanced operational performance."

However, this didn't stop Novae edging down 2.88p to 360p.

Meanwhile, on Aim, Borders & Southern moved 1.5p higher to 85.5p after raising £46m in a share placing. The driller had lost nearly a third of its value on Monday after its announcement that it had found gas condensate off the Falkland Islands and not, as many had hoped, oil.

Roman Abramovich-backed Highland Gold was 3.5p lower at 128p following the news that Canada's Barrick Gold had got rid of its stake in the yellow metal digger for 120p a share.