FTSE 250 movers: Tullow surges on well update; Thomas Cook slumps on downgrade

London’s FTSE 250 was up 0.8% to 16,761.14 at 1440 GMT as investors digested the UK budget and looked ahead to the Fed’s rate announcement.

Oil and gas exploration group Tullow Oil was the standout gainer after saying its Cheptuket-1 well in Northern Kenya has encountered good oil shows.

Cheptuket-1, which is in Block 12A, is the first well to test the Kerio Valley Basin and was drilled by the PR Marriott Rig-46 to a final depth of 3,083 metres.

The objective of the well was to establish a working petroleum system and test a structural closure in the south-western part of the basin.

Tullow said the strong oil shows encountered in Cheptuket-1 indicate the presence of an active petroleum system with significant oil generation. Post-well analysis is in progress ahead of defining the future exploration programme in the basin.

Tullow, Cairn Energy and Wood Group also got a boost from Chancellor George Osborne's cut to North Sea taxes.

Vectura was also in the black after it agreed on the terms of a merger with Skyepharma.

Under the terms of the deal, Skyepharma shareholders will get 2.7977 new Vectura shares for each Skyepharma share. Based on Vectura’s closing price of 146.60p on Tuesday, this values Skyepharma at 410.15p per share or around £441.13m.

There will also be a partial cash alternative of up to £70m pursuant to which Skyepharma shareholders can elect to receive cash instead of some or all of the new Vectura shares to which they would otherwise be entitled under the merger.

Dr Samir Devani, managing director of Rx Securities, said the deal was likely to be significantly earnings-enhancing for Vectura shareholders and will provide stronger long-term growth for Skyepharma shareholders.

Thomas Cook suffered the brunt of the losses after Citigroup downgraded the stock to ‘sell’ from ‘neutral’, although the bank expects a solid second-quarter statement from the tour operator.

The bank cut its forecasts on Thomas Cook amid ongoing earnings risk given an expected significant European airline capacity increase which could put pressure on prices.

It also pointed to a tightening supply/demand balance for hotels which could put pressure on costs.

Moneysupermarket.com was also in the red after founder Simon Nixon sold his remaining stake in the price comparison website for £124m.

AG Barr and Britvic were under pressure after Osborne announced new taxes on sugary drinks.

Risers

Tullow Oil (TLW) 200.20p 4.22%
Pets at Home Group (PETS) 278.50p 3.57%
Wood Group (John) (WG.) 638.50p 3.32%
Cairn Energy (CNE) 197.70p 3.24%
Crest Nicholson Holdings (CRST) 546.00p 3.12%
Zoopla Property Group (WI) (ZPLA) 242.80p 3.10%
Amec Foster Wheeler (AMFW) 493.10p 2.71%
Ocado Group (OCDO) 277.40p 2.59%
Vectura Group (VEC) 150.30p 2.52%
Dunelm Group (DNLM) 970.00p 2.48%

Fallers

Thomas Cook Group (TCG) 96.55p -4.97%
Evraz (EVR) 80.45p -4.85%
Barr (A.G.) (BAG) 527.50p -4.78%
Moneysupermarket.com Group (MONY) 328.50p -4.39%
CLS Holdings (CLI) 1,525.00p -3.24%
Spire Healthcare Group (SPI) 333.40p -3.17%
Britvic (BVIC) 688.00p -2.96%
AO World (AO.) 169.20p -2.87%
Vedanta Resources (VED) 297.40p -2.49%
Indivior (INDV) 162.40p -2.46%