The FTSE 100 was in the red on Thursday (14 December) as underperforming utilities weighed on performance. By the close the index of leading UK shares was down 0.7% at 7,448.12.
It’s a pretty quiet coming seven days as everyone starts to wind down for Christmas. Next Tuesday (19 December) US building permits data should offer an insight into the health of the US housing market and the German Ifo Business Climate index is also published (see Economic update). In the early hours of next Thursday (21 December) the Bank of Japan is set to announce its latest monetary policy decision. Unlike the US Federal Reserve, which hiked rates for the third time in 2017 on 13 December, the Japanese central bank continues to maintain rates at rock bottom. Later in the day the final estimate of US third quarter GDP is released.
Early in the week oil prices surged above $65 per barrel for the first time in two years, helping to lift big oil producers like BP (BP.) and Royal Dutch Shell (RDSB). In keeping with the volatile nature of the oil market though, most of those gains were given up as the International Energy Agency projected a global surplus of crude in the first half of 2018, driven by rising US shale production. The big gains came on Tuesday (12 December) as the Forties pipeline was closed for emergency repairs over the next few weeks. This key piece of infrastructure, which only changed hands from BP to chemicals business Ineos six weeks ago, delivers around 40% of the oil and gas output from the UK North Sea. Although the spike in oil prices was a positive for the sector, the closure has consequences for producers which rely on access to the pipeline. Serica Energy (SQZ:AIM), currently working through a high-profile deal to acquire assets from BP, reduced its 2017 production guidance from a range of 2,200 to 2,400 barrels of oil per day (bopd) to 2,000 bopd. Its shares falling 3.5% to 73.1p in response.
The German Ifo Business climate index, based on a survey of a large number of businesses, has a good track record of predicting movements in GDP and will offer some insight into whether the German economy can repeat its strong 2017 performance in 2018.
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18 December – Engineer Goodwin (GDWN), which is 48% owned by the Goodwin family, has struggled in 2017 as profit has been hit by pricing pressure on products sold to the oil and gas and mining sectors. Investors will be hoping it can end the year on a brighter note with its results for the six months to 31 October. The company issued a brief reassuring statement in September.
19 December - Getting a new chief executive in place is clearly something Blancco Technology (BLTG:AIM) investors would love to see in the first quarter update on 19 December. That would neatly close what has been a torrid year of poorly planned acquisitions, shady revenue recognition and serious management problems. The market appears to think there are some good products and firm underlying demand, hence the 40% share price rally since early November.
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