Analysts were divided this week on whether a rally in London markets that started on Tuesday afternoon was anything more than a shallow gesture. Certainly by Friday, investors were holding fire ahead of key data coming out of the US. The FTSE 100 opened the week at 5691 points before bottoming out Tuesday at 5522 and then marching ahead to 5779 on Friday morning before investors backed off.
Overall, it was an encouraging performance inspired by a rebound in the strength of the Euro against the dollar and healthier job figures in the States. Reflecting that mood, a mighty 161 London-listed stocks reached new 12-month highs this week, double the number last week, while just 44 slumped to new lows.
Excitement in the Falklands
This week, despite all manner of uncertainties surrounding the oil discovery by Desire Petroleum (LON:DES) in the Falkland Islands, shares in the group soared – as did those of others nearby, including Rockhopper Exploration (LON:RKH) and Argos Resources (LON:ARG) . Questions over how commercial the discovery might be, combined with the spectre of political tension in the region, failed to dampen investor enthusiasm. Why is that? Most importantly, the discovery reinforced the view of risk-taking investors that plunging cash into Falklands explorers might have been the right call. Rockhopper’s Sea Lion success now look less isolated, less like a lucky one-off. There is more to play for. But whether that will smooth out the chances of “flash crashes” or simply ratchet up the speculative volatility in these stocks, remains to be seen.
Among those feeling the pain in the oil and gas universe were Nighthawk Energy Plc (LON:HAWK) , which saw its stock drop below 8p for a time on news that it was set to sell of all its US assets bar the flagship Jolly Ranch project in Colorado. Shares in gas storage and oil explorer Independent Resources (LON:IRG) touched 38p as the company struggled to shake off the disappointment of October’s dry exploration well on its acreage in Tunisia.
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