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FTSE revives but Centrica slides over gas rigging fears
The FTSE 100 rallied to close 19 points higher, but Centrica fell in response to allegations of gas price fixing.
16.55: The FTSE 100 turned round to close 19 points or 0.3% higher at 5,786, but Centrica (CNA.L) was one of the day's biggest fallers in response to allegations of gas price fixing.
Centrica, the owner of British Gas, fell nearly 9p or 2.75% to 310.8p despite issuing a statement denying its involvement and saying it had 'very robust governance and compliance policies'.
It said its traders were prohibited from providing price information to reporting agencies and stressed there were more than 50 partcipants in the market, not just energy suppliers.
SSE (SSE.L), down 12p to £13.76, also denied its involvement. 'We are entirely confident that our energy portfolio management team operate in a fair and legitimate way.'
According to a report in the Guardian, the wholesale gas market was subject to price fixing in a similar way to the manipulation of the Libor interest rate by banks.
Seth Freedman, the whistle blower who helped the Guardian in its story, told the BBC that he was assisting the Financial Services Authority in its inquiries into the gas market. He said the City watchdog had been 'amazing' in its response. Energy regulator Ofgem said it was also looking into the claims.
A spokesman for the prime minister said any energy companies found guilty of rigging gas prices should be fined and severely reprimanded.
The energy sector was also clouded by a sharp fall in the share price of E.ON, the German utility, after it said it was reviewing its outlook for next year in light of the European recession.
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