FTSE latest: Cairn up; LSE down

By This Is Money
Updated: 12:22 EDT, 21 December 2009

17.15

The FTSE 100 index closed almost 100 points higher today after energy stocks surged and investors eyed a New Year revival in takeover activity.

The deal hopes were lifted after drug maker Sanofi-Aventis agreed to buy US health care products company Chattem and mining equipment maker Bucyrus International purchased Terex's mining equipment division.

The Footsie closed 97.18 points up at 5,293.99.

On the currency markets, the pound dropped around 0.5% against the dollar as traders prepared for Tuesday's third-quarter GDP release, which is expected to show the UK economy contracted by 0.1%, rather than the 0.3% previously thought.

Oil explorer Cairn Energy set the pace in the FTSE 100 as shares surged almost 5% or 142p higher at 3,188p after the company said drilling off the coast of western Greenland will start a year ahead of schedule.

Royal Dutch Shell was also up 48p to 1767p or 3% amid reports of Chinese interest in Nigerian assets up for sale.

Interest in the sector was heightened by the latest meeting of the OPEC oil cartel scheduled for Tuesday, with no change in production levels for 2010 expected.

Shell's rival BP added 14.6p to 591.1p, while explorer Tullow Oil improved 26p to 1278p.

Bankers were also on a firmer footing after suffering last week on worries over the new capital buffers which could be imposed by regulators in Basel to prevent another financial crisis.

Barclays steadied with a gain of more than 3% or 8.75p to 273p, while Standard Chartered lifted 48.5p to 1543p and HSBC was 22.5p dearer at 702.5p.

British Airways was another gainer, up 4.5p to 193p as the airline continued to claw back ground after its successful injunction against a devastating Christmas strike.

Meanwhile cruise ship operator Carnival was on the front foot, adding 53p to 2149p as brokers lifted ratings after Friday's well-received results.

However, temporary power specialist Aggreko made a disappointing start to life as a top flight stock. Shares were 13p lower at 887p following its promotion from the FTSE 250 Index on Friday.

London Stock Exchange was 11.5p down at 706p after it announced plans to buy smaller rival Turquoise and merge it with its Baikal business.

In the second tier, oil services firm Hunting was the top riser, adding 36.5p to 543.5p or 7% after it forecast trading 'toward the high end of market expectations' this year.

Johnson Service Group was another strong riser as it announced new banking facilities through to April 2013. The new terms with a consortium of banks including Lloyds and Royal Bank of Scotland is worth £78.5m and comes after a period of major debt reduction at the Johnsons dry cleaning firm.

Shares rose 3% or 0.75p to 23.25p.

The biggest Footsie risers were Cairn Energy up 142p at 3,188p, Prudential 27p higher at 625p, Aviva up 15p at 384.7p and Old Mutual 3.9p higher at 107.3p.

The biggest fallers were London Stock Exchange down 11.5p at 706p, Aggreko off 13p at 887p and Sage down 1p at 223.2p.

17.00

Gold at the close was $1103.00-1103.60 an ounce, from $1101.90-$1102.40 previously.

The pound at 5pm was $1.6081 compared to $1.6079 at the previous close, and the euro £0.8903 from £0.8881.

15.30

The FTSE 100 index is 108.3 points up at 5,305.1, as mobile phone giant Vodafone has confirmed it will begin selling Apple's iPhone in the UK on 14 January, leaving the shares 1.75p up at 141.75p.

Looking ahead: '[There are] expectations that tomorrow's revised UK GDP data could show that the UK recession is close to being over,' says Michael Hewson of CMC Markets.

'Sterling continues to remain at the lower end of its recent range in thin trade ahead of tomorrow's final revisions to Q3 GDP data, and the release on Wednesday of the Bank of England monetary policy meeting minutes.'

US markets also opened higher, with the Dow Jones up 47 on the open, rallying in tandem with the dollar for the first time since the Lehman collapse, as investors become more confident about the US economy, and the likelihood of the Fed starting to tighten monetary policy early next year.

13.30

The FTSE 100 index was up 64.2 points at 5,261 by lunchtime. Oil explorer Cairn Energy set the pace, as shares surged almost 5% or 146p to 3192p after the company said drilling in Greenland will start a year ahead of schedule.

Royal Dutch Shell was meanwhile up 41.5p to 1760.5p or 2% amid reports of Chinese interest in Nigerian assets up for sale. Interest in the sector was heightened by the latest meeting of the Opec oil cartel scheduled for Tuesday, with no change in production levels for 2010 expected.

Shell's rival BP added 12.7p to 589.2p, while explorer Tullow Oil improved 26p to 1278p.

Bankers were also on a firmer footing today after suffering last week on worries over the new capital buffers which could be imposed by regulators in Basel to prevent another financial crisis.

Barclays steadied today with a gain of more than 2% or 6.3p to 270.5p, while Standard Chartered lifted 32.5p to 1527p and HSBC was 13.8p dearer at 693.8p.

British Airways was another gainer, up 3.9p to 192.4p as the airline continued to claw back ground after its successful injunction against a devastating Christmas strike.

Meanwhile cruise ship operator Carnival was on the front foot, adding 49p to 2145p as brokers lifted ratings after Friday's well-received results. However, temporary power specialist Aggreko made a disappointing start to life as a top flight stock. Shares were 14p lower at 886p following its promotion from the FTSE 250 Index on Friday.

London Stock Exchange was 3p down at 714.5p after it announced plans to buy smaller rival Turquoise and merge it with its Baikal business. In the second tier, oil services firm Hunting was the top riser, adding 28.5p to 535.5p or 5.5% after it forecast trading 'toward the high end of market expectations' this year.

Johnson Service Group was another strong riser as it announced new banking facilities through to April 2013. The new terms with a consortium of banks including Lloyds and Royal Bank of Scotland is worth £78.5 million and comes after a period of major debt reduction at the Johnsons dry cleaning firm.

Shares rose 3% or 0.75p to 23.25p.

11.00

'There's an element of investors' buying on the falls but there's also a touch of re-jigging given that Wall street closed higher on Friday,' says Keith Bowman, analyst at Hargreaves Lansdown.

'There's a conflict within the market with worries over sovereign debt battling corporate earnings, where we have seen stronger performances in recent days.'

Tullow Oil gained 21p to 1,273p after the Financial Times reported one of its senior executives revealed the explorer is likely to scupper Heritage Oil's proposed £930m sale of its Ugandan assets to energy group ENI.