Dip in Northumbrian Water
Nov 21 2008 by Scott Farnetti, Brewin Dolphin
EQUITY markets remained on the back foot yesterday as UK shares lost over 3%, led by falls in the mining and oil and gas sectors.
On a positive note, oil prices sunk to their lowest level for almost two years and now stand over 60% lower than several months back.
This should help ease inflation further and cut costs for consumers. Furthermore, economic data surprisingly showed that retail sales over the last three months had held up better than expected.
The on-going falls in equity markets continued to hit local shares. Although some economists are tipping oil to continue its slide into next year, this did not help the local transportation companies as shares in Go-Ahead and Arriva slid back.
Elsewhere, Northumbrian Water headed lower following a cut in its price target by Merrill Lynch. The shares have held up very well compared to the market over the last year. GlaxoSmithKline, meanwhile, has acquired a number of leading over-the-counter medicines from rival Astrazeneca.
GlaxoSmithKline, which has a market value of £62bn, expects to realise sales and cost synergies through the addition of AZ Tika brands into its existing portfolio.
Companies exposed to construction and property fared badly, with Tolent, Tanfield, Grainger and Barratt all falling in excess of 8%.
Bellway managed to buck the trend by ending the day in positive territory. Biofuels company D1 Oils also saw a respite after a recent sell-off its shares as it gained nearly 11%.
Scott Farnetti, investment adviser, Brewin Dolphin
