Newspaper article The Evening Standard (London, England)

Oil Sell-Off Nudges Foootsie into Reserve

Newspaper article The Evening Standard (London, England)

Oil Sell-Off Nudges Foootsie into Reserve

Article excerpt

MORGAN STANLEY is one of those with high hopes for investment returns in 2006.

The US broker reckons a big boost to corporate spending combined with American interest rates reaching the top of their cycle will be instrumental in propelling the market 5%-10% higher. It recommends buying those companies that should benefit most from increased capital spending, strong balance sheets and "true" growth.

Tips for next year include advertising group WPP, unmoved on 5701/2p, cruise operator Carnival, down 25p at 3246p, Imperial Tobacco, up 13p at 1728p, Ryanair, 17 cents lower at e7.20 and chemicals producer Yule Catto, 33/4p better at 274p.

But the bull market was put on hold today as share prices were dragged lower by a sell-off in oil stocks. That left the FTSE 100 index down 4.8 at 5472.6 in thin trading conditions.

Oil companies came in for profittaking on Wall Street last night, reflecting a softer crude price of around $57 a barrel on the futures market.

Cairn Energy fell 26p to 1829p, BP 61/2p to 638p, BG 41/2p to 544p and Royal Dutch Shell 16p to 1887p.

Sentiment in the sector was also undermined by continuing fears that Chancellor Gordon Brown may be moved to introduce a windfall tax on oil companies in next week's Pre-Budget review. The money is needed to plug an [pounds sterling]11 billion gap in public finances.

Max Petroleum dipped 21/2p to 881/2p after a parcel of five million shares went through at 91p.

Pallet maker Brambles Indus-

tries led the Footsie 250 index higher with a jump of 311/4p to 395p after announcing plans to sell its waste management business Cleanaway and return cash to shareholders.

Cleanaway could fetch between [pounds sterling]900 million and [pounds sterling]950 million and will signal a restructuring of the group, leaving it to focus on its core pallet and documents management business Recall. Broker Merrill Lynch has a neutral rating on the shares but rival Seymour Pierce says Brambles is far too expensive and should be sold.

MFI lost an early lead to dip 1/4p to 71p after broker Panmure Gordon downgraded from hold to sell while slashing its target from 98p to 50p. …

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