London open: Markets rebound but energy shares lower, Afren plummets

UK stocks rose on Monday morning, bouncing back after a heavy drop the previous session despite a continued fall in oil prices.

The FTSE 100 was up 0.6% at 6,537 early on, after having dropped over 1% to 6,501.14 on Friday following a mixed reaction to the latest US jobs report. US non-farm payrolls for December beat expectations and the jobless rate fell, but wages declined.

“The FTSE was left licking its wounds on Friday after the worst start to the year since 2008,” said trader Rocky Muddar from TradeNext.

Oil prices were in focus on Monday with Brent crude down 2.8% at just $48.69 a barrel, extending losses after last week reaching its lowest level in over five and a half years.

Goldman Sachs cut its forecast for Brent in three months’ time to just $42 a barrel, and said that prices will “need to stay lower for longer”.

Monday’s session looks set to be relatively quiet in terms of economic data, though things will pick up later in the week. Chinese trade figures are due out overnight, while inflation data from the UK, Eurozone and US will be released over the coming days.

Investors will also be looking ahead to the unofficial start of US fourth-quarter earnings season on Monday night, with aluminium giant Alcoa releasing its results after the closing bell on Wall Street. JPMorgan Chase & Co, Goldman Sachs and Well Fargo will also report this week.

Shire edges higher, Afren plummets

Biopharmaceutical group Shire was making small gains after agreeing to acquire US rival NPS Pharmaceuticals for $5.2bn in cash, in a deal which Shire says will boost its revenue and earnings growth profile, while creating new business opportunities worldwide.

Oil and gas group Afren was a big mover early on, dropping 19% after reporting that analysis of the Barda Rash field in the Kurdistan region of Iraq showed a “material reduction” in reserve estimates. The company said it is now looking at its “strategic options” for its 60% interest in the project.

Others in the oil and gas sector were also under pressure as crude prices continued to fall, with Hunting, Wood Group, Petrofac, Shell and BG Group trading firmly in the red.

Heading the other way was electrical appliances seller AO World, which jumped 8% after saying it was confident of hitting full-year expectations following 26% revenue growth in the third quarter and strong demand seen on Black Friday.

Housebuilder Taylor Wimpey rose after painting an upbeat outlook for the UK housing market and lifting its margin guidance slightly for 2014. The company said it entered 2015 in an “excellent position” with a record order book.

Market Movers
techMARK 2,997.03 +0.49%
FTSE 100 6,537.33 +0.56%
FTSE 250 16,040.94 +0.19%

FTSE 100 - Risers
Carnival (CCL) 3,099.00p +2.75%
GKN (GKN) 347.00p +2.72%
CRH (CRH) 1,557.00p +2.23%
ARM Holdings (ARM) 1,000.00p +2.20%
SABMiller (SAB) 3,385.50p +1.94%
G4S (GFS) 277.10p +1.91%
Mondi (MNDI) 1,068.00p +1.81%
WPP (WPP) 1,382.00p +1.77%
Intu Properties (INTU) 340.00p +1.71%
Compass Group (CPG) 1,099.00p +1.67%

FTSE 100 - Fallers
SSE (SSE) 1,560.00p -2.19%
Standard Chartered (STAN) 932.70p -1.31%
Centrica (CNA) 265.40p -1.26%
Antofagasta (ANTO) 741.50p -1.13%
Weir Group (WEIR) 1,752.00p -0.85%
Royal Dutch Shell 'B' (RDSB) 2,150.00p -0.46%
Lloyds Banking Group (LLOY) 73.46p -0.38%
Royal Dutch Shell 'A' (RDSA) 2,099.50p -0.33%
Intertek Group (ITRK) 2,451.00p -0.33%
BG Group (BG.) 828.60p -0.18%

FTSE 250 - Risers
AO World (AO.) 267.00p +8.05%
Barr (A.G.) (BAG) 610.00p +4.36%
Diploma (DPLM) 748.50p +3.96%
Zoopla Property Group (WI) (ZPLA) 176.40p +2.98%
Hikma Pharmaceuticals (HIK) 2,347.00p +2.80%
Laird (LRD) 310.00p +2.79%
Elementis (ELM) 277.30p +2.67%
Supergroup (SGP) 790.00p +2.46%
Acacia Mining (ACA) 287.20p +2.39%
Centamin (DI) (CEY) 65.70p +2.26%

FTSE 250 - Fallers
Afren (AFR) 31.92p -18.80%
Hunting (HTG) 431.00p -10.13%
Wood Group (John) (WG.) 545.00p -3.88%
Petrofac Ltd. (PFC) 613.50p -3.46%
Serco Group (SRP) 155.40p -2.75%
IP Group (IPO) 210.00p -2.51%
Amec Foster Wheeler (AMFW) 805.00p -2.31%
Drax Group (DRX) 371.40p -1.88%
Soco International (SIA) 263.90p -1.82%
Renishaw (RSW) 2,309.00p -1.74%