Heritage Oil slips as market talk fuels some profit taking
THE large cap index gained nearly one per cent, or 31.96 points, higher yesterday at 4,436.75, driven by gains in mining and energy stocks, while banks rose on growing investor confidence.
Mid cap Heritage Oil lost some of its recent gains, dropping nearly 11 per cent to 540p, amid profit-taking and some speculation that its reverse takeover deal with Genel Energy could be on the rocks.
A spokesperson for the company confirmed that the two companies were still on a roadshow together and that there was no reason to believe that its Genel’s Iraqi contracts would not be ratified.
BP, Royal Dutch Shell and Cairn Energy rose between 0.4 and 0.8 per cent, while BG Group and Tullow Oil lost 0.7 and 1.6 per cent respectively.
Miners added the most points to the index, lifted by a 8.1 per cent rise in Eurasian Natural Resources after it said prices may rise for its most profitable product, ferrochrome.
Antofagasta put on 4.6 per cent after the Chilean copper miner said it was on track with expansion plans under which output will jump 60 per cent by 2011.
Within the sector, Vedanta Resource, Kazakhmys, Rio Tinto, BHP Billiton and Xstrata surged 2.6 per cent to 8.5 per cent.
Banks were generally higher, boosted by overnight news that top US banks have been cleared to repay state aid.
HSBC, Royal Bank of Scotland and Lloyds Banking Group advanced 3.2 per cent to 5 per cent. Barclays and Standard Chartered, however, slipped 0.5 and 0.6 per cent respectively.
Policymakers and executives remained cautious on the economic outlook, while data presented a mix picture.
Bank of England policymaker Kate Barker was quoted as saying on the Leicester Mercury newspaper’s website that British interest rates could stay low for some time and it is still not clear whether the pick-up in the economy will prove durable.
On the downside, Thomas Cook fell 7.1 per cent, after gaining 10 percent in the previous session. The travel group said on Tuesday that it had not had an approach in relation to the acquisition of Arcandor’s 53 per cent stake or a potential offer for the company.
Cruise operator Carnival shed 3 per cent, hurt by a price target cut from Morgan Stanley.
Defensive stocks were also down, with Vodafone, AstraZeneca, GlaxoSmithKline and Shire losing 0.3 per cent to 2.1 per cent.