Market Report: Drax shares fall at news of plans to shut Britain’s remaining coal-fired power stations

Market Report

Jamie Nimmo
Thursday 19 November 2015 02:05 GMT
Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends
Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends (Getty Images)

Message to Amber Rudd: don’t expect a Christmas card from Drax this year. The Energy Secretary’s plans to shut the UK’s remaining coal-fired power stations by 2025, replacing them with gas-fired ones, caused the power firm’s shares to fall 9.4p to 217.1p.

Analysts speculated that the proposals would mean closing Drax’s remaining coal plants two years earlier than planned. Shares in the FTSE 250 company have halved this year since the Government said it was slashing green energy subsidies, reversing pledges made by the Coalition.

The company, which runs the coal and biomass-fired Drax power station in North Yorkshire, had already been shifting its business to biomass, but the Government appears to be against supporting its renewable energy push.Drax pulled out of a £1bn carbon-capture project in September because of the subsidy cuts.

On the wider market, rallying miners helped the FTSE 100 to climb by 10.21 points to 6,278.97, offsetting more weakness in tourism stocks caused by fears of more terror attacks.

Antofagasta rose 27.6p to 500p after Goldman Sachs took a shine to the Chilean copper miner, upgrading it from “sell” to “neutral”, while Glencore rose by 4.48p to 93.31p amid hopes that it can find a buyer for its agricultural business as the commodities trader-cum-miner continues its asset sell-off to pay down debt.

The British Airways and Iberia owner IAG fell 18.5p to 573p as investors continued to dump tourism-related stocks, with EasyJet losing 16p to close at 1,694p.

InterContinental Hotels, which owns the Holiday Inn and Crowne Plaza brands, fell 35p to 2,465p for the same reason, as did cruise ship operator Carnival, which sank 48p to 3,400p.

Gambling software group Playtech fell 12.5p to 861.5p as watchdogs delayed a decision on its £460m takeover of online trading firm Plus500 until next month. The terms of the tie-up state that if a deal is not done by the end of the year, it may be terminated. Plus500 fell 0.5p to 356p.

The oil firm Soco International fell 28.75p, or 16 per cent, to 149.25p after it said production at its H5 wellhead platform at the Te Giac Trang field in Vietnam was below expectations.

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