Investors fuelled by Cairn Energy discovery

Wednesday, 9 March: London stocks were mixed, as investors sought cover from risk assets ahead of the ECB meeting tomorrow. A deposit rate cut is widely expected, along with an increase in size and duration of its asset purchase programme.

FTSE 250 Cairn Energy (+12.9%) was the big winner today as it announced results from its second well appraisal offshore in Senegal. The Group commented it was “delighted” with the test results. The first test produced a maximum flow rate of 5,400 barrels of oil per day and a main flow rate of 4,000 barrels of oil per day, both of which over 24 hours from a 15.0 metre zone.

The biggest loser in London today was Restaurant Group (-22.3%) as the announcement of a softer 2016 outlook gripped investors. Like-for-like sales look set to remain depressed, with revenue growth driven solely by new store openings. Rounding up 2015, trading was impacted by flooding in related areas, and lower retail footfall after citing the first half of 2015 as being strong, and denoting the second half of trading as being more variable.

The ONS recorded 0.3% UK production growth on the month in January, 0.2% higher than a year earlier. This data came in weaker than a consensus read of 0.5% on the month. Digging deeper into the data, factory output rose 0.7% on the month thanks to bumper production at small firms specialising in jewellery, musical instruments and medical devices. However, this slight uplift was negated by a 6.3% slump in oil and gas production, which weighed on overall industrial performance. The numbers provide further signs that the UK economy slowed in the first quarter as a slowdown in emerging markets and patchy growth in the developed world weighed on global manufacturing.

At the close European indices were up with the FTSE 100 +0.34%, with the CAC 40 +0.49%, and the DAX 30 +0.31%.

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