London Evening Standard: Market report: Wednesday close: “BP's shares today put on 7 1/2p to reach a new high for the year…”: “Rival Shell is another big player that has been enjoying a good run, coming up from 385p in the past three months despite the continuing scandal over mis-stated oil reserves.” (ShellNews.net)
Posted 7 October 2004
EVERY penny rise in the share price of BP, which boasts a market value of £119bn, adds a point to the FTSE 100 index.
BP's shares today put on 7 1/2p to reach a new high for the year of 556 1/2p, restricting the fall in the index as the price of US sweet light crude hit more than $51 a barrel.
The shares have risen from a low of 410p since the start of the year and from 480p in the past six weeks. Dealers say they have been one of the main catalysts behind the stock market's strong run of late and were helping to underpin trade today as a parcel of 65m shares went through at 557 1/4p.
Rival Shell is another big player that has been enjoying a good run, coming up from 385p in the past three months despite the continuing scandal over mis-stated oil reserves. The shares rose 3p to 421 1/4p today after a line of 23m went through at 424 1/2p. In the event, the Footsie was down just 0.80 of a point at 4706.30, reflecting opening falls on Wall Street this afternoon.
European airlines are an obvious casualty of soaring fuel costs. US securities house Goldman Sachs has downgraded the sector and says the industry is not built for an oil price at $30 a barrel, let alone $50. It has been telling clients that 2005 is likely to be another lost year because the recent share price strength cannot be reconciled-with the prospect of even more rises in the price of crude.
It has cut its earnings per share* estimate for British Airways, down 2 1/4p at 207 1/2p, from 16.6p to 12.84p. No-frills operator Ryanair, off 11 cents at €3.84, has also had its earnings cut by Goldman, from 27 cents to 24 cents.
Air charter broker Air Partner stood out with a jump of 15p to 410p after reporting pre-tax profits up nearly a third at £3.71m. The results were boosted by the heavy work generated by the conflict in Iraq, which has now started to slow.
Mining shares have also provided a prop to the market of late as they benefit from the economic boom in China. But broker UBS seems to think we may have seen the best from the sector for now.
It has downgraded BHP Billiton, 6 1/2p dearer at 604 1/2p, from buy to neutral but raised its 12-month target from 575p to 625p. It has made a similar move with Rio Tinto, up 30p at 1550p, with the target raised from 1550p to 1650p, and Anglo American, 16p better at 1334p (target up from 1350p to 1450p). UBS has repeated its neutral stance on Xstrata, 6p higher at 924p, with the target up from 825p to 925p.
Drugs giant AstraZeneca's attempts at reassuring the City about its new drugs pipeline appear to have fallen on deaf ears. The shares fell 69p to a low for the year of 2214p with brokers looking to downgrade their earnings expectations after guidance from the company. It is still in talks with the US Food and Drug Administration about allowing its anti-clotting agent Exanta to be marketed.
WIN, which supplies text messaging systems, made its debut on AIM after a placing* at 202p by Arden Partners, a breakaway from the old broking firm of Albert E Sharp in Birmingham, raising £10m. The shares were trading at 214p.
Commerzbank's pick of the utilities sector is Centrica, off 1/4p at 249 3/4p, which has agreed to buy Dyno-Rod for £60m. It forecasts earnings growth of almost 30% during the next two years and says the current rating of 10 times earnings appears too low when taking into account Centrica's long-term growth prospects.