Falling US gas prices hit Weir shares

Published on Tuesday 31 January 2012 00:00

Shares in Glasgow-based pumps and valves firm Weir Group were lower yesterday after a broker warned it faced some risk from lower natural gas prices in North America.

Last week the FTSE 100 company upped its stake in the controversial fracking market for unconventional gas sources with the acquisition of US specialist Novatech.

Andrew Carter, an analyst at RBC Capital Markets, said: “Fourth-quarter results from Weir’s customers, the oil and gas service companies, confirm that the recent fall in the natural gas price has made the outlook for North American pressure pumpers a little less certain.”

But he said firms were still looking to buy equipment and the impact on Weir would be limited. RBC recommended buying the shares with a target price of 2,500p, but Weir dropped 26p to 1,944p.

The banking sector suffered as talks on restructuring Greek debt dragged on, with some European Union officials questioning whether any agreement between Athens and its bondholders will be enough to avoid a default in the longer term.

Barclays and Lloyds Banking Group both lost 4 per cent of their value, down 9.3p to 213.6p and 1.3p to 31.1p respectively.

The negative sentiment from the eurozone pulled the FTSE 100 index down 62.36 points to 5,671.09, reversing much of its recent gains.

Royal Bank of Scotland was 1p lower at 26.8p after a weekend of turmoil that saw chief executive Stephen Hester give up his £1 million shares bonus.

On Aim, Alva-based Omega Diagnostics received a boost as finance director Kieron Harbinson added to his stake in the company with the purchase of 90,000 shares. The firm closed 1 per cent higher at 10.75p.

NEW YORK: Wall Street ended slightly lower last night on stalled Greek debt talks, but an afternoon rally cut losses in a sign of the underlying resilience the market has shown early in the year.

The Dow Jones industrial average shed 7.04 points, or 0.06 per cent, to close at 12,653.42 while the broader Standard & Poor’s 500 Index dropped 3.35 points, or 0.25 per cent, to close on 1,312.98. The Nasdaq Composite Index ended the day down 4.61 points, or 0.16 per cent, at 2,811.94.

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