London midday: Stocks trim gains, but CRH and Tullow surge

CRH and energy stocks pushed the FTSE 100 higher by Monday lunchtime, though gains were pared as investors digested data and watched developments in Greece.

London’s benchmark index was up 0.3% at 6,771 by midday, having pulled back after hitting a high of 6,795.52 early on.

CRH was on the rise after agreeing a deal to buy assets from Holcim and Lafarge, while energy shares were boosted by a recent rebound in crude along with M&A speculation.

Brent oil futures were up 3% at $54,58 on Monday extending gains after having spiked the previous session on the back of news of reduced drilling in the States. Crude surged as much as 8% on Friday, rebounding from a six-year low, after data from Baker Hughes showed that the number of US rigs drilling for oil dropped by 94, or 7%, last week.

In economic news, China’s manufacturing purchasing managers’ index (PMI) recorded its first monthly contraction in over two years in January, according to government data released on Sunday. The PMI fell to 49.8 last month from 50.1 in December, the first time below the key 50-point breakeven mark since September 2012, surprising economists who had predicted a small improvement to 50.2.

The UK manufacturing PMI increased from 52.5 to 53 in January, ahead of the 52.7 estimate, while the Eurozone manufacturing PMI was confirmed at 51 in January, as expected.

Over in Greece, Finance Minister Yanis Varoufakis has said the nation needs the European Central Bank’s assistance to bolster banks. He also said Greece will not accept any more aid under its existing bailout agreement.

“We believe that the likelihood of a Greek exit is now significantly higher than at any point in 2012, in view of the latest political events,” according to Barclays Research analysts.

CRH and oil stocks rise

Irish building materials group CRH rose nearly 6% after confirming it will spend €6.5bn on assets from Holcim and Lafarge as the two European cement makers dispose of operations to win approval for their merger. CRH said it expected the deal to make it the “global number-three building materials player”, and will finance the acquisition using a combination of existing cash, bank facilities and an equity placing.

Energy stocks such as Tullow, BG Group, Shell, Premier Oil, Cairn Energy and Ophir Energy were making decent gains after the recent rebound in crude. Tullow in particular jumped 6% on the back of rumours that Shell could make a bid for its smaller rival.

Enquest rose after saying that it would get $23m back after exiting its investments in Tunisia, though 2014 production would be slightly lower than previously thought as a result.

Shares in struggling oil group Afren rebounded strongly, up 58%, though were still well below levels seen at the start of the year. After saying that it was in need of immediate funding, the company announced over the weekend that lenders had allowed it to defer a $50m payment due on its debt by a month. Afren also said it would delay a $15m bond coupon payment.

In contrast, the rising oil price was weighing on shares in travel groups such as Easyjet and IAG. Sentiment was also dampened after sector peer Ryanair warned that the collapse in oil over the last few months will hit air fares.

Market Movers
techMARK 3,048.20 -0.09%
FTSE 100 6,770.56 +0.31%
FTSE 250 16,295.49 -0.06%

FTSE 100 - Risers
Tullow Oil (TLW) 385.50p +5.62%
CRH (CRH) 1,692.00p +5.55%
BG Group (BG.) 929.90p +4.85%
Sainsbury (J) (SBRY) 265.20p +3.84%
Royal Dutch Shell 'B' (RDSB) 2,181.50p +3.66%
Royal Dutch Shell 'A' (RDSA) 2,084.00p +3.27%
BHP Billiton (BLT) 1,477.50p +2.39%
BP (BP.) 433.65p +2.17%
Weir Group (WEIR) 1,714.00p +2.02%
Shire Plc (SHP) 4,929.00p +1.55%

FTSE 100 - Fallers
easyJet (EZJ) 1,774.00p -4.73%
International Consolidated Airlines Group SA (CDI) (IAG) 533.00p -2.11%
Wolseley (WOS) 3,785.00p -1.99%
Carnival (CCL) 2,948.00p -1.64%
Kingfisher (KGF) 337.20p -1.63%
Ashtead Group (AHT) 1,071.00p -1.56%
United Utilities Group (UU.) 1,011.00p -1.56%
Fresnillo (FRES) 885.50p -1.50%
Severn Trent (SVT) 2,122.00p -1.39%
Next (NXT) 7,140.00p -1.31%

FTSE 250 - Risers
Afren (AFR) 8.35p +57.55%
Premier Oil (PMO) 155.30p +7.40%
Ophir Energy (OPHR) 143.30p +6.70%
Wood Group (John) (WG.) 601.00p +5.25%
Soco International (SIA) 275.50p +4.67%
Hunting (HTG) 415.40p +4.45%
Vedanta Resources (VED) 388.00p +3.91%
Petrofac Ltd. (PFC) 728.50p +3.19%
RPS Group (RPS) 188.00p +3.07%
Grainger (GRI) 199.70p +2.99%