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FTSE 100 ekes out small gains as Tullow sinks

Whitbread and Tullow Oil top and tail the FTSE 100. Euro moves higher.

 
FTSE 100 ekes out small gains as Tullow sinks

(Update 16:22) The FTSE 100 shook off earlier weakness to continue its slow December trudge higher, rising slightly alongside other ‘risk’ assets after signs of economic improvement in Germany. 

London’s benchmark index – which has been rising slowly since mid-November – eked out a small 7 point gain to 5928 while the euro climbed by 0.4% to $1.2995 after the ZEW survey of German investor sentiment leapt higher.  Investors were also responding to a Spanish bond auction and preparing for tomorrow’s conclusion of the US Federal Reserve’s policy setting meeting.

US markets opened higher, with the Dow and S&P 500 both making gains of around 0.8%, while the oil price climbed by 0.3% to $107, based on Brent crude futures.

In London, Tullow extended its losses, heading down nearly 8% to 1156p (see report below).

09:30: Whitbread sprints to top of flat FTSE 100

Hotel and restaurant group Whitbread (WTB.L) rose to the top of the FTSE 100, adding 98p, or 4%, to £25.26, as it reported 14.4% year-on-year growth in third quarter sales.

Costa Coffee contributed strongly to the group’s sales with 25.5% year-on-year growth, while the group's sales at its hotel chain Premier Inns increased 12.6%.

Britain’s markets got off to a lacklustre start as the FTSE 100 shed 0.01%, or 0.5 points, to 5,921 and the Mid-250 index added 0.1%, or 12 points, to 12,190.

HSBC (HSBA.L) agreed to pay $1.92 billion (£1.2 billion), the largest ever fine paid by a bank, to settle a criminal probe into money laundering at the bank.

The fine follows a report by the US Senate which was critical of the bank’s failure to put adequate money laundering controls in place when dealing with high-risk customers. The report also said the bank has been used by ‘drug kingpins and rogue nations’ for moving money around the world. Shares edged down 1.8p, or 0.3%, to 639p.

Standard Chartered (STAN.L) also agreed to pay a $327 million (£203 million) fine for violating US sanctions and dealing with customers in Iran, Sudan, Libya and Burma. Shares slipped 9.5p, or 0.6%, to £14.88.

Tullow Oil (TLW.L) languished at the bottom of the FTSE 100, down 68p, or 5.4%, to £11.91, as it announced it has agreed to buy Norwegian firm Spring Energy and sell its existing North Sea holdings, in a deal worth $372 million (£231 million).

Spring Energy holds 28 licences across Norway’s continental shelf and will drill 16 exploration wells over the next two years.

Diageo (DGE.L) shed 29p, or 1.5%, to £18.57 as its announced talks with Tequila-maker Jose Cuervo ended without an agreement to renew its distribution licence.

Miner ENRC (ENRC.L) fell 5.1p, or 1.8%, to £12.56 as analysts at Citigroup cut their rating on the stock from ‘neutral’ to ‘sell’.

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