Market Report: Syria tensions drive oil majors higher

A dire situation in Syria and the threat of military intervention pummelled stocks globally but investors rushed to invest in oil and gas giants, betting the oil price will continue to spike.

The Syrian situation pushed oil to a six-month high and oil groups BG Group, Shell and BP all benefited.

Mike van Dulken, the head of research at Accendo Markets, said: "As the situation in the Middle East escalates and the prospect of imminent military intervention in Syria looks a real possibility, it raises concerns about supply of such an economically key commodity. Brent crude is up at a six-month high … and US light crude is trading at levels last seen in May 2011."

BG was 57.5p higher at 1,267.5p, Shell rose 44p to 2,221p and BP 5.55p to 452.65p.

The wider market was weak as traders remained nervous. The Bank of England's Governor, Mark Carney, clarified his forward guidance on interest rates.

Will Hedden, a trader at the spreadbetting group IG, said: "Markets for once are of a more positive disposition, thinking that the general improvement in the UK economy and, more generally, the global one, will continue, forcing the MPC's hand ahead of expectations."

The FTSE 100 slipped 10.91 to 6,430.06, and Mr Hedden added: "With only two days of trading left in August it is entirely possible that we will see markets suffer further losses."

On the mid-cap index, BG Group's partner in an oilfield in Tanzania announced the completion of a well appraisal. Ophir Energy owns 40 per cent of the Pweza-2 well and BG has 60 per cent. Shares in Ophir, which is part-owned by the Indian steel tycoon and Queens Park Rangers part-owner Lakshmi Mittal, have lost more than 15 per cent since the beginning of August, after a sell-off following its half-year results. The group has also suffered since Mr Mittal sold half of his stake in February. But analysts at Investec warned that the market had "become myopic towards Ophir" and had a too narrow focus on single prospects that had "obscured the real exploration narrative" of the oil and gas explorer.

Investec has reduced its price target to 390p from 520p but retains its buy rating for the group, which edged up 5p to 320p.

Traders looking for takeover tittle-tattle could revisit the water and waste group Pennon after analysts at JPMorgan said investors should rule out M&A activity in the utilities sector, despite the failure of Canadian-led bidders to buy Severn Trent this summer.

UK water groups will be hit with new regulations at the end of next year when Ofwat announces its final rulings. But JP Morgan said the cost of borrowing was low and there was "no immediate risk" of the regulator preventing a company from piling on debt.

JPMorgan's Edmund Reid said Pennon's waste business "offers both structural growth and the potential for cyclical upside", and raised it to buy, up from neutral, with a 745p target.

The recommendation helped Pennon gain 12.5p to 693.5p. It has been a rumoured takeover target for some time, with traders speculating French services company Veolia could be interested in Pennon's waste subsidiary Viridor.

The printing specialist Xaar produced a 39.5p gain to 869.5p ahead of its half-year results today.

The industrial property group Hansteen benefited from the demise of Warner Estate Holdings and advanced 3p to 99p. Warner has filed for administration and Hansteen will take over the management of Aviva's £460m Ashtenne Industrial Fund that was handled by Warner, while all 95 staff will transfer to Hansteen. Hansteen is spending £52m on a 26.3 per cent stake in the fund.

Spurious bid rumours accompanied a 2.75p rise to 88.25p for the European electrical retail group Darty.

Oxford BioMedica was 0.33p healthier at 1.74p after it received $1m (£643,000) from the drugs giant Pfizer thanks to the start of a cancer treatment trial.

The big data technology specialist WANDisco gained 15p to 997p after it announced it is hiring the former BT executive Richard Fletcher as vice-president of worldwide engineering.

Premier African Minerals announced a "positive" mining study from its Tungsten project in Zimbabwe and advanced 1.55p to 2.2p.

CareTech Holdings, a social care provider, rose 9p to 191.5p after it bought a 29-strong property portfolio of freeholds of buildings it operates from, for £38m.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine