FTSE 100 up on the week as fears of military action recede. Court win buoys AIM listed Gulf Keystone

13th September 2013


The FTSE100 closed at 6,583 rising around 36 points in an unsettled week that brought mixed economic news and while fears of military action in Syria increased and then receded.

The week on the FTSE 200 started with early optimism buoyed a little by economic news from Japan fresh from winning the right to host the Olympic.

But concerns about the Middle East crisis and the impact on energy costs soon came to the fore. While not directly related to Syria, British Gas said that delays to supplies from another Middle Eastern country Egypt and one definitely beyond the fray Norway would cut 2014 production by 30,000 barrels.

BG shares ended Monday 65p lower at £12.17 leading the FTSE down.

However as the threat of military action receded, market sentiment improved during the week also helped by better economic news from China.

On Tuesday, Glencore Xstrata suggested savings from the merger finalised four months ago would reach $2bn rather than the previously suggested $500m.

The presentation was accompanied by an indication that the firm would shelve riskier projects with  shares rising 12.25p to 333.55p on Tuesday.

Undoubtedly one of the week’s biggest winners was Gulf Keystone Petroleum which saw off a legal challenge in from US Excalibur Ventures. The US firm was claiming up to a third of its reserves in Northern Iraq. It shares, which had briefly been suspended, ended Tuesday 17% higher at 219.25p, valuing the company at more than £1.9bn.

The day’s big faller was GlaxoSmithKline which fells 41.5p to 1598.5p as competitors readied themselves to produce generic copies of its lung treatment product Advair. Panmure Gordon Securities noted the drug accounted for 18% of revenues and 25% of profits.

On Wedneday, ARM, the UK chip maker benefited from Apple’s latest results rising 5% while the phone giant itself fell back over concerns about its pricing policy primarily for the Chinese market and a lack of news about other product developments.

But with Apple’s iPhone 5S due to be the first to use Arm’s finger print scanner analysts were at least positive about the supplier.

On Thursday, markets took Morrison’s 21.8 per cent fall in half year profits in their stride climbing 5.3p to 302.5p on Thursday. The firm has a deal with Ocado, and plans to open 200 local ‘M’ stores by the end of 2014 which may have satisfied at some investors that things will improve medium term.

Next did post profits moving higher adding 15p to £52.05 following an 8.2% rise in first half profits. It remains a favoured stock among analysts.

Sheridan Admans investment research manager at The Share Centre said: “It is encouraging to see the retailer aims to continue cost savings, grow and invest in its online business and expand its retail space. It sees a combination of high street stores and online operations as a key to enhance earnings.

“For now we continue to recommend Next as a strong ‘hold’ for investors as employment and the UK economy show tentative signs of improving.”

Friday saw a flat market closing down 5.18 points though near its monthly high as immediate fears about Syria have been assuaged.

The market awaits next Wednesday tapering decision. Opinion divides on what will happen.

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