Market Report: JKX Oil & Gas get rude reminder of Ukraine realities

Supermarkets and miners dragged the Footsie 64.29 points lower

Oscar Williams-Grut
Tuesday 23 September 2014 00:11

With the Scottish referendum, the rise of Isis and all manner of other distractions, you could be forgiven for forgetting about Ukraine. But investors in JKX Oil & Gas got a rude reminder of the realities yesterday.

The Ukrainian and Russian focused operator warned last month that it would be hit by emergency legislation passed by the Ukrainian government doubling the tax on gas production to an eye-watering 55 per cent.

Yesterday JKX said the rise would cost it an estimated $10m (£6.2m), with the cost to be covered by slashing spending in the country by 25 per cent. JKX tumbled 2.75p to 43p.

Supermarkets and miners dragged the Footsie 64.29 points lower to 6,773.63, after a calamitous profit warning from Tesco, off 26.6p at 203p, and pessimism ahead of Chinese manufacturing data due today.

Tui Travel was one of the few companies able to book gains, adding 7.2p to 391p ahead of its pending merger with German parent company Tui AG.

News of a possible listing of the Russian steel maker Evraz’s North American business sparked a rally last week, but the company, whose largest shareholder is Roman Abramovich, suffered a hefty correction. Evraz lost 21.5p to 123.5p, as Barclays poured cold water on the deal. The bank believes Evraz will want to retain control of the business and feels that frosty relations between Russia and the West could weigh on the deal.

Investors pulled their cash from the Israeli spread-betting and CFD operator Plus500 amid scrutiny of who exactly is using the service. The Financial Conduct Authority has reportedly taken an interest in how the Aim-listed operator recruits customers. Unlike its rivals the company does not check the identity of customers until they attempt to withdraw money from the service. Plus500 lost 30p to 394p.

Fox Marble slipped 3p to 20.5p as it revealed that first half losses rose to €1.2m (£940,000), from €1.07m a year ago. The company is digging marble out of the quarries in Kosovo that were the source for stone for the US White House.

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