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Oil above $57 but Korean tensions return

25 September 2017 16:27

The Brent crude oil price was heading for its highest closing level in two years on Monday helping lift BP (BP.) 1% to 472p and Royal Dutch Shell (RDSB) by 0.7% to £22.54.

The global benchmark for oil was trading above $57 per barrel as Russia and OPEC said production cuts were helping to reduce the global glut of supply and traders eyed possible supply disruption as the Kurdistan region of northern Iraq prepared to vote on independence.

This helped repair some of the earlier damage done by a strong pound. At the close the FTSE 100 was down just a handful of points at around the 7,300 mark.

The blue-chip index derives 70% of its earnings overseas and the strength of sterling against the euro has implications for the relative value of those earnings.

Investors were worried that a surge of support for the far-right AfD party would make it more difficult for German chancellor Angela Merkel to reform the eurozone, resulting in a weaker single currency.

Financial firms and miners struggled, with Standard Chartered (STAN) and Anglo American (AAL) leading both sectors lower with falls of 1.9% and 3.1% respectively.


The S&P 500 was 0.5% lower at 2,489.36 in early trading after more aggressive rhetoric from North Korea.


Insurer RSA (RSA) fell 2.5% to 618.5p late on as it issued a trading update just before 4pm warning of an impact from catastrophe losses from the US, Caribbean and Mexico which have been hit by natural disasters.

Hurricane Maria has also hit Essentra (ESNT) pretty hard as it shut down two packaging sites in Puerto Rico. Several obstacles were flagged, which are expected to prevent the sites re-opening in the immediate future. Shares in the distributor were down just 1.1% to 500.5p as Essentra is expected to recover a significant amount of the £0.5m to £0.75m a week costs resulting from the closures from its insurer.

Hospital operator NMC Health (NMC) received all regulatory approvals for its long-term care facility Chronic Care Specialty Medical Center in Jeddah, Saudi Arabia. Despite the good news the shares failed to hold on to earlier gains and fell 1% to £26.46.

Shares in addiction specialist Indivior (INDV) were lifted 1.7% to 330.5p on confirmation that its US subsidiary Indivior, together with Monosol Rx, entered a settlement agreement with Mylan. The settlement concerned patent litigation related to Indivior's SUBOXONE sublingual film.

Waste management firm Pennon (PNN) was on track to deliver in-line with management expectations across its water and waste businesses, but this failed to excite as the stock was flat at 790.5p.

Tullow Oil (TLW) said it would work with Ghana's government to put in place necessary permits to restart development drilling in the TEN fields and expects to resume drilling around the end of 2017. Shares in the company jumped 6.8%.

Real estate investor Shaftesbury (SHB) was flat at £10.13 on a warning that economic uncertainty is dampening demand for its larger properties.


Communications tech company Imagination Technologies (IMG) agreed to sell its worldwide MIPS CPU business to Tallwood MIPS for $65m in cash and the rest of the business to Chinese firm for £550m, triggering a 28.4% share price rally to 164.9p.

A confident outlook and hiked dividend at housebuilder MJ Gleeson (GLE) pushed the share price 6.2% higher to 657.6p. Pre-tax profit was up 17% to £33m in the year to 30 June 2017.

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