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(Alliance News) - Stock prices in London opened higher on Monday with oil majors among the blue-chip risers, while shares in travel-related companies fell due to the UK government's likely delay of lockdown lifting.
The FTSE 100 index was up 47.00 points, or 0.7%, at 7,181.10. The mid-cap FTSE 250 index was up 106.35 points, or 0.5%, at 22,840.48. The AIM All-Share index was up 0.1% at 1,251.37.
The Cboe UK 100 index was up 0.6% at 715.70. The Cboe 250 was up 0.4% at 20,544.76. The Cboe Small Companies was down 0.1% at 15,139.25.
In Paris the CAC 40 was up 0.6%, while the DAX 30 in Frankfurt was up 0.5%.
In the FTSE 100, Royal Dutch Shell was the best performer, with the 'A' and 'B' shares both up 2.0%, after Reuters reported on Sunday that the oil major is reviewing its holdings in the largest US oil field for a potential sale.
Citing people familiar with the matter, Reuters reported the move was part of Shell's shift away from fossil fuels as it faces growing pressure to slash carbon emissions.
Reuters said the sale could be for part or all of Shell's position in the US Permian Basin, located mostly in Texas, which accounted for around 6% of the Anglo-Dutch company's total oil and gas output last year. The holdings could be worth more than USD10 billion, the people said.
BP was up 1.0% after the oil major said it has joined up with Statkraft and Aker Offshore Wind in a ‎consortium bidding to develop offshore wind energy in Norway.
Each company will hold a third stake in the partnership, which will pursue a bid to develop offshore wind power in the Sorlige Nordsjo II licence area. The licence area's "favourable location" provides power export access to local and adjacent markets.
The ‎consortium also plans to explore opportunities to provide clean power to electrify ‎offshore oil and gas facilities.
Brent oil was quoted at USD73.22 a barrel Monday morning, sharply higher than USD72.85 late Friday. The North Sea benchmark was trading at its highest levels since late 2018.
At the other end of the large caps, gold miners Fresnillo and Polymetal International were the worst performers, down 2.0% and 1.8% respectively, tracking spot gold prices lower. Mid-cap peer Hochschild Mining was the worst performer, down 2.0%.
The precious metal was trading at USD1,860.82 an ounce, down from USD1,894.00.
CRH was down 0.9% after Morgan Stanley downgraded the Irish building materials firm to Equal Weight from Overweight.
In the FTSE 250, Serco Group was the best performer, up 5.1%, after the outsourcer raised its profit guidance on the back of promising trading and sealed a UK defence deal alongside Engie, worth up to GBP3.4 billion.
Vivo Defence Services, a 50-50 joint-venture with Courbevoie, France-based energy firm Engie, has won contracts to provide facilities management services to the UK's Defence Infrastructure Organisation. The DIO is responsible for the UK Ministry of Defence's estate.
In addition, Serco on Monday said its "strong" trading at the start of the year has continued further into 2021.
As a result, Serco raised its underlying trading profit guidance by GBP15 million to GBP200 million. This would represent growth of 23% from GBP163.1 million posted in 2020.
Elsewhere, Esken was down 20% after the aviation and energy company confirmed that Stobart Air has ceased trading and is appointing a liquidator, after its intended buyer failed to secure funding for the deal.
Aer Lingus was forced to cancel a number of regional flights over the weekend after operator Stobart Air ended its contract with the Irish airline, which is part of International Consolidated Airlines Group. The announcement affected several flights from Dublin and Belfast City airports to UK cities.
An Aer Lingus statement said: "Stobart Air referred to the continuing impact of the pandemic which has resulted in almost no flying since March 2020. Stobart Air has ceased trading and is now in the process of appointing a liquidator."
Esken, formerly Stobart Group, had agreed back in April to sell Stobart Air to Isle of Man-based Ettyl for a nominal GBP2, plus up to GBP7.5 million by 2024 depending on performance.
Late last month, Esken first said the sale was delayed as it awaited change of control consents that would have allowed Stobart Air to keep its contracts under the new ownership. Then it said it had become aware that Ettyl's proposed financing was no longer available and that Ettyl was in discussions with another potential financing source.
On Monday, Esken said it will continue to be responsible for the lease obligations on eight ATR aircraft to April 2023 and will try to sublease these to another operator. It also has some obligations to Aer Lingus.
Overall, the cash outflow if Esken is unable to sublease the planes will be GBP34 million in financial 2022, up from the GBP16 million impact previously expected from Stobart Air. In financial 2023, this is GBP22 million, up from GBP9 million, and in financial 2024, it is GBP26 million, up from GBP24 million.
The Japanese Nikkei 225 index closed up 0.7%. Financial markets on Monday were closed in Hong Kong and Shanghai for the Dragon Boat Festival holiday. In Sydney, the Australian Securities Exchange was closed for the Queen's Birthday holiday.
UK Prime Minister Boris Johnson is facing a furious backlash from Tory MPs as he prepares to put the final lifting of coronavirus lockdown restrictions in England on hold.
Johnson is expected to announce the ending of social-distancing rules - which had been slated for June 21 - will be delayed for four weeks to July 19, with the BBC reporting early on Monday the decision had been signed off by senior ministers.
The move follows warnings from scientists that the rapid spread of the delta variant first identified in India risks a "substantial" third wave if it is allowed to spread unchecked.
Johnson is expected to appeal to the public to show patience, with one last push to ensure that when controls do finally end it is "irreversible".
However, it comes as a huge setback to many businesses - particularly in the battered hospitality sector - which had pinned their hopes on a full summer reopening to recoup some of the losses of the past year.
There was deep frustration among lockdown sceptics on the Conservative benches who said there was no reason not to end the restrictions as those most at risk of death or serious illness are now fully vaccinated.
Former minister Mark Harper, the chair of the Covid Recovery Group of Tory MPs, said any postponement would be a "political choice". He warned that if the unlocking did not go ahead as planned, restrictions could carry on through the autumn and into the winter as other respiratory infections picked up.
Travel stocks International Consolidated Airlines, easyJet and Ryanair were down 2.0%, 1.8% and 0.8% respectively. Hospitality firms InterContinental Hotels Group and Whitbread were both off 0.6%.
The pound was quoted at USD1.4110 early Monday, up slightly from USD1.4105 at the London equities close Friday.
The euro was priced at USD.2100, up marginally from USD1.2096. Against the Japanese yen, the dollar was trading at JPY109.74, slightly lower from JPY109.80.
The economic events calendar on Monday has eurozone industrial production at 1000 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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