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UK Equities
Oil stocks help keep FTSE steady
From the Financial Times of Mon, 15 Dec 2014 09:28:25 GMT

Rebounding oil stocks helped the FTSE 100 defy expectations for opening losses as it shrugged off weakness among its Asian peers.

Tullow Oil, one of the biggest fallers during the drop in oil prices, topped the leaderboard as Brent crude bounced back from a five-year low. The stock was 2.5 per cent higher at 376.3p. BG Group was in second place, up 2.2 per cent at 837.3p. Weir Group, the engineer highly exposed to oilfield services markets, rose 1.5 per cent to £17.26, while Petrofac regained 1.4 per cent to 688p.

Among the oil majors, BP rose 0.5 per cent to 387.6p and Royal Dutch Shell added 1.2 per cent to £20.55.

“Few will want to believe this uptick is anything more than a passing phase, but the other subject that’s very much in focus for the sector is a degree of consolidation and there’s some argument to say this is why Tullow is topping the board for now,” said Tony Cross, market analyst at Trustnet Direct.

Mid-cap oil stocks also moved to the top of the mid-cap FTSE 250. Afren topped the second-tier index, up 8 per cent at 37.2p. Premier Oil was 5.1 per cent higher at 165p. The FTSE 250 ticked 0.1 per cent higher to 15,388.60.

The FTSE 100 held steady at 6,303.33, with the oil stock rally helping prevent wider losses, which were expected after Monday’s Asian equities markets tracked sharp losses on Wall Street in late trade on Friday.

The more uncertain feel to trade across global markets also drew defensive stocks on to London’s leaderboard. British American Tobacco was 1.3 per cent higher at £34.47, while Imperial Tobacco rose 1.1 per cent to £27.40. Vodafone rose 0.7 per cent to 216.7p.

Speciality chemicals company Johnson Matthey slipped 0.1 per cent to £31.97 after it sold its gold and silver refining business to Japan’s Asahi Holdings for £118m.

Shares in Greggs, the high street bakery chain, warmed up after an upbeat trading update. The company said it expected it annual profit to beat forecasts after like-for-like sales rose 5.2 per cent in the 24 weeks to December 13.

Clive Black, analyst at Shore Capital, said: “Greggs will be benefiting from materially more benign input costs, initially in flour, cream and pork and more latterly from oil. The latter will be helping distribution costs at the margins with the promise of potentially lower bakery costs in the new year if energy prices continue to contract.”

The stock gained 4.1 per cent to 683.5p.

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