Market update - 4 August

The FTSE 100 was down 5.3 points at 5,349.4 at 11:51 am today.

On the leader board, the oil majors tracked the price of crude, which edged up past $125 per barrel, and Royal Dutch Shell was up 29p at 1,809p. Drax, the company behind the coal-fired power station in Yorkshire, also benefited from firmer commodities prices and gained 12p to 721p. The housing materials group Wolseley was the strongest on the benchmark index, up 10.5p at 350.25p, following talk that it may offload Stock Building Supply, its North Carolina-based subsidiary. Its private equity-owned rival HD Supply, Nasdaq-listed Builders First Source and Pro-Build are billed as the most likely buyers.

Moving up?

Imperial Energy, the Commonwealth of Independent States-focused oil & gas explorer and producer, leapt to 1170p, up 96p or 8.94 per cent. The company has confirmed a second takeover approach, widely believed to be from China's Sinopec, the state-backed oil refining and petrochemical group. The news follows an earlier 1,290p per share approach from the Oil & Natural Gas Corporation, the Indian state-backed oil & gas business.

Reacting to the news, Cazenove said that the two bidders may join hands. "There has been high level engagement between the Chinese and Indian governments to facilitate co-operation between the two countries when investing / acquiring overseas oil assets. As far as we understand, this never resulted in a formal agreement, but rather an informal [Memorandum of Understanding] of sorts… Both companies have a declared appetite for oil assets, especially those that offer good production growth - in many ways, Imperial's portfolio is tailor-made for either or both. So, it is not inconceivable that ONGC (majority government owned) and Sinopec (an arm of the government) team up to avoid competing against each other. We note that neither company has ever consummated a foreign corporate takeover of a listed entity," the broker said.

JP Morgan also weighed in, suggesting the final take-out price may be as high as 1,409p per share.

The broker said: "Summing up, our risk-based calculation of the potential value of Imperial Energy suggests the possibility of an attractive return on the shares. At this stage, we believe the shares are only a moderate fundamental value proposition, but the optionality of the deal makes them significantly more interesting."

Elsewhere, the pub operator Punch Taverns gained 17.25p to 274.75p following reports of potential bid interest from the private equity firm CVC Capital Partners.

Game was up 4.5p at 264.5p after UBS moved the stock to a short-term "buy".

"The games industry does not appear to have been affected by the consumer slowdown in the UK to date, implying some countercyclical qualities to the Game business model. Competitive threats also appear overdone, with pricing remaining relatively stable at present. We view the risk from digital downloading as a long-term concern and unlikely to affect forecasts for this cycle," the broker said.

Centrica, up 3.5p at 300.5p, and British Energy, up 13p at 713p, were firm as speculation mounted about a possible all-share merger between the two companies. The hopes follow the break down of takeover talks between British Energy and France's EDF.

Moving down?

The mining sector proved a drag on the FTSE 100 as metals prices moved lower -Eurasian Natural Resources Corporation was the worst off, down 50p at 1006p. Kazakhmys, at second place on the loser board, was down 62p at 1,361p, and Vedanta Resources slipped by 83p to 1,828p.

The banking sector was also down following results from HSBC, down 19p at 818p. The bank reported a 28 per cent drop in first half profits, broadly in line with analyst forecasts. In the wider sector Standard Chartered was weaker by 50p at 1443p and HBOS lost 5.25p to 297p.

Start your day with The Independent, sign up for daily news emails
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

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

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

Day In a Page

Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

They shall not be moved: jobless protesters bring Tunisia to a halt

A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

Hanging with the Hoff

Working with David Hasselhoff on his new TV series was an education for Ella Smith
Can Dubai's Design District 'hipster village' attract the right type of goatee-wearing individualist?

Hipsters of Arabia

Can Dubai’s ‘creative village’ attract the right type of goatee-wearing individualist?
The cult of Roger Federer: What is it that inspires such obsessive devotion?

The cult of Roger Federer

What is it that inspires such obsessive devotion?
Kuala Lumpur's street food: Not a 'scene', more a way of life

Malaysian munchies

With new flights, the amazing street food of Kuala Lumpur just got more accessible
10 best festival beauty

Mud guards: 10 best festival beauty

Whether you're off to the Isle of Wight, Glastonbury or a local music event, we've found the products to help you
Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe

A Different League

Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe, says Pete Jenson
Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey - Steve Bunce

Steve Bunce on Boxing

Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey
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