Market Report: What about the galaxy surrounding the oil industry?

Investors have been quick to sell out of oil businesses as prices fall, but what about the galaxy surrounding the industry?

Scottish engineer Weir Group tumbled 80p to 2,047p yesterday after Exane BNP Paribas hit it with a double downgrade to underperform. Jonathan Mounsey at the broker thinks the recent slump in oil prices will have big implications for Weir’s oil and gas business, which represents a third of revenues. Mr Mounsey estimates the number of oil rigs could reduce by as much as 25 per cent, with a knock-on effect on demand for Weir equipment.

The FTSE opened lower on the news that Japan has entered a surprise recession, but the index turned higher in afternoon trade thanks to hints from ECB president Mario Draghi that more quantitative easing could be on the cards. It closed up 17.60 points at 6,671.97.

United Utilities swirled up 13p to 886.5p amid continued chatter that a Canadian pension fund could be considering a bid for the company.

The South Asian focused oil and gas explorer Salamander Energy leapt over 20 per cent on Friday after revealing the details of a proposed bid from Spanish energy company CEPSA. But CEPSA said yesterday that Friday’s disclosure was made “without its consent”, adding that it is “considering its position”. Salamander fell 7.5p to 109.5p.

The ongoing instability in Ukraine is taking its toll on JKX Oil & Gas, which dropped 3p to 34.62p after revealing a fall in third quarter production. The company forecast a further slump ahead.

Former sub-penny stock Fitbug continued its remarkable rise, adding a further 3.95p to 12.12p thanks to frenzied support from retail investors.

News of the resignation of its joint broker Canaccord Genuity sent crisis-hit Quindell tumbling 13p to 55.5p, falling further below the crucial 70p threshold. That price is thought to be the level at which chairman Rob Terry and other directors must put up more collateral in the form of either cash or shares to back the loans they recently took out to buy Quindell stock.