Market Report: Political paralysis puts a drag on Drax

Punters in Drax will be forgiven for wishing politicians would just get their act together. The power station operator has been waiting on tenterhooks for the government to make a decision on green energy subsidies, seen as vital to its future plans and, according to some, its takeover potential.

Yesterday, however, it was hit by the news that the announcement – originally due in spring – had been put off for a second time, and is now unlikely to be made until after MPs return in September from their summer recess.

The amount of support for renewable power is important for Drax because it won't commit to investing in plans to generate more energy from eco-friendly biomass until they know the level of subsidies available.

There has also been speculation in the City that Drax could find itself in play as a takeover target once the future is clearer, with British Gas owner Centrica, 4.9p worse off at 321.2p, one name put forward by analysts as a potential suitor.

Yet investors were clearly unwilling to wait, with Drax finishing the session as one of the mid-tier index's worst performers after sliding 32.5p to 540.5p. This was despite Deutsche Bank's James Brand doing his best to put a brave face on it, saying he did not think the postponement "signals a lack of support for biomass" while adding that the market should "see any near-term weakness in the shares as a buying opportunity".

US Fed boss Ben Bernanke's first bit of testimony to Congress disappointed those hoping for hints of QE3 as the FTSE 100 shifted back 33.34 points to 5629.09. Still, optimists may choose to take heart from the fact he still has the second part of his statement to go today, with Capital Spreads' Angus Campbell pointing out he "could just as easily provide some better news for the bulls".

G4S chief executive Nick Buckles' grilling by MPs over the Olympics fiasco was clearly not doing much to soothe the market's fears, as the security services giant reached its lowest for nearly eight months, dropping 14.6p to 240p. Still, there was some good news for Mr Buckles, with fund manager Invesco – G4S's second largest shareholder – saying he should not resign.

Barclays managed to rise for the first time in a week, ticking up 1.3p to 159p after Citigroup kept the bank on its list of favourite stocks. Economists from the broker claimed the UK sector was "one-step removed from the eurozone crisis", although Royal Bank of Scotland, down 3p to 201.5p, was still on their "least-preferred" list because of its exposure to Ireland.

More generally, the number-crunchers were predicting a return to growth for the UK in 2013, but warned that the eurozone would see a "mild recession" both this year and the next. Citi's analysts used this as a justification for reiterating their preference for easyJet – founded by Sir Stelios Haji-Ioannou – saying the budget airline, which crept up 1.5p to 558p, "looks well-placed to benefit from travellers trading down".

CSR was racing away at the top of the FTSE 250. The chip maker was lifted 73.7p to 292p after agreeing to sell its handset business to South Korean tech giant Samsung for $310m (£198m).

Meanwhile, longstanding vague bid speculation around US pharma group BioMarin was being reheated for the umpteenth time, with market gossips once again suggesting blue-chip drug maker AstraZeneca, up 13.5p to 2,953p, as a possible bidder for the rumour mill favourite.

There was some deal activity on Aim where wheel maker Titan Europe jumped 17p to 130p after announcing it had received an approach from shareholder Titan International.

Fellow Aim stock Ncondezi Coal moved down 0.75p to 26p despite reports from India claiming the miner is in talks with Adani Enterprises over the potential sale of a minority stake in its assets.

Elsewhere, investment group Creon Resources powered up 0.23p to 1.22p as traders applauded news that the tiddler had agreed a joint venture with Chinese shipbuilding giant Yangzijiang.

Premier Oil 375.8p (up 14p, 3.87 per cent) Driller spurts higher after getting a push from analysts at Bernstein who decide to raise their price target to 570p from 470p and keep their "outperform" rating.

Salamander Energy 195.4p (up 6.8p, 3.61 per cent) Asia-focused explorer continues its strong start to the week, with its share price now having added more than 9 per cent over the past two trading sessions.

Morgan Crucible 269.2p (down 10.5p, 3.75 per cent) Engineer is knocked back despite JP Morgan Cazenove keeping its "overweight" rating, although the broker does cut its target price to 360p from 390p.

IG Group 450.7p (down 11.8p, 2.55 per cent) Spread-betting company finishes the day in the red after revealing it saw a drop in revenues over the first six weeks of the new financial year.

BSkyB 695p (up 6.5p, 0.94 per cent) Satellite broadcaster climbs as scribblers from Espirito Santo say its Now TV streaming service "seems to tick all boxes, including competition, regulation and consumer demand".

Hammerson 467p (up 2.6p, 0.56 per cent) Anglo-French property company's recent impressive run continues, with its share price now having added more than 14 per cent since June.

National Grid 662p (down 20.5p, 3 per cent) Utility continues to fall in the wake of Ofgem announcing new regulatory proposals on Monday, as Société Gé*érale cuts its price target on the stock to 642p from 673p.

Rio Tinto 2,916.5p (down 69.5p, 2.33 per cent) Heavyweight miner finishes in the red after announcing its production figures, with iron ore sales over the second-quarter slightly less than its output.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
Suited and booted in the Lanvin show at the Paris menswear collections
fashionParis Fashion Week
News
i100
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
News
An asteroid is set to pass so close to Earth it will be visible with binoculars
news
News
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: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project