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Last updated: February 7, 2013 8:19 pm
Weir Group hit its highest in nearly a year, outperforming a weak London market, as results from a US engineer put short sellers under pressure.
Weir rose 0.6 per cent to £20.78 after Patterson UTI Energy reported a surge in demand for fracking equipment.
The arrival of delayed orders meant that Patterson was able to put idled equipment back to work, meaning that revenue at its pressure pumping division jumped 17 per cent from the previous quarter.
Weir has been targeted by hedge funds on expectations that an oversupply of fracking equipment would erode its profit margins.
The group supplies half the high-pressure pumps used in the US and Canadian shale gas markets and its oil and gas division is forecast to provide a third of group sales this year.
Short interest in Weir stood at 16.2 per cent of its free float this week, down from 26.5 per cent in June, Markit data show.
Over the same period, the stock has jumped nearly 50 per cent.
Dealers also highlighted China’s third auction of shale gasfields later this year.
Weir’s Chinese joint venture made it the only pressure-pump supplier with domestic production, Berenberg Bank noted.
The wider market fell for the first day in three, with the FTSE 100 down 1.1 per cent, or 66.92 points, to 6,228.42.
Burberry slumped 6.5 per cent to £13.37 after the surprise news that Stacey Cartwright, its chief financial officer since 2004, would be stepping down.
The stock’s drop also reflected China’s move to outlaw television and radio adverts promoting luxury gifts, dealers said.
China’s media watchdog had this week issued a directive calling on broadcasters not to show adverts that spread “incorrect values” of extravagance and waste, the state news agency Xinhua reported.
Kazakhmys drifted 0.7 per cent to 739.5p, even after confirming that it was in early-stage talks to sell its power assets, which are a 50:50 joint venture with the Kazakh government.
A disposal would dilute group earnings by about a fifth but the suggested price-tag of $1.6bn would allow Kazakhmys to halve its 2014 net debt, said Credit Suisse.
Ophir Energy dropped 8.6 per cent to 475p after pre-flotation shareholders Och-Ziff Capital Management and Mittal Investments each sold half their stakes.
The 9 per cent share sale, which was priced at the bottom of the indicative range at 475p, overshadowed a mildly positive exploration update from its Tanzania development.
Merrill Lynch highlighted the fact that BG, Ophir’s partner in Tanzania, had this week flagged up infrastructure problems at the gas project and provided a gross resource estimate that was half Ophir’s assessment.
The share sale also highlighted Ophir’s 2013 funding shortfall of $450m, which remained unresolved, said Merrill Lynch.
Compass Group led the blue-chip gainers, up 1.8 per cent to 779.5p, after the caterer delivered 6 per cent organic revenue growth.
Weakness in Europe was offset by emerging markets growth and a robust performance in North America, which kept growing in spite of hurricane Sandy and a National Hockey League labour dispute.
Vodafone rallied 0.9 per cent to 171.9p after confirming its full-year profit guidance, in spite of challenging trading in most markets.
Smiths Group was up 0.9 per cent to £12.15 on a recommendation from HSBC.
“The US housing market recovery is gathering pace and looks increasingly likely to be the precursor to a broad-based pick-up in US industrial production, driving volume growth and margins in 2013 across all divisions,” HSBC said.
It added: “Shareholder value growth could continue in 2014 if, as we expect, the bottoming of the interest rate cycle reopens the door to disposals.”
Supergroup , the fashion retailer, soared 15.2 per cent to 730p after its Christmas trading update exceeded expectations.
Online grocer Ocado jumped 10.7 per cent to 115p after in-line annual results and a reassurance that its second distribution centre would open in the next few weeks.
Thomas Cook rose 19.6 per cent to 85.5p after narrowing its quarterly loss and outlining a further £60m of cost savings.
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