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(ShareCast News) - Oil stocks were under the cosh despite a decision from OPEC to extend a supply cut deal for another nine months, although in the oil equipment space it was Petrofac that was inflicting the greatest pain.
Crude oil futures retreated sharply just after reports of the oil cartel's decision, as some analysts had been expecting deeper cuts, although by 1449 BST they had trimmed an initial slide to trade just 0.45% lower to $53.72 as investors waited on the formal announcement at 1600 BST.
"As previously, oil's recent gains have left little room to the upside unless OPEC can unleash deeper cuts, which comments from ministers this morning suggest is highly unlikely. It's worth bearing in mind that OPEC meetings are always full of statements and rumours that give crude a good beating about for the day. With the official announcement not due until 4pm UK time it could be a long day for oil traders," said Neil Wilson at ETX Capital.
Of interest, Bloomberg reported that Algeria's oil minister might be leaving his post after Thursday's OPEC meeting.
That was of potential interest in the medium-term because he was believed to have played a key role in brokering the original November 2016 output cut deal.
In parallel, Petrofac shares plunged to their lowest mark since 2009 after the Serious Fraud Office accused the oilfield services company of failing to co-operate properly with its investigation into bribery and money laundering allegations.
Fixed line telecoms were also under pressure after analysts at Exane BNP Paribas downgraded shares of BT Group from 'neutral' to 'underperform'.
At the same time, the broker cut its target price was cut by 15% to 260p.
Exane said BT's underlying business was "teetering on the edge" and that it had identified more than a dozen factors - excluding regulations - which would drag on its operating profits and free cash flows more than markets were anticipating.
"In our view the market is mispricing BT as they transition from growth to decline," Exane said.
Shares in mobile peer Vodafone on the other hand were moving to the upside, with one City-based trader citing 'momentum trades'.
Stock in Tate&Lyle was also lower despite reporting an 85% jump in full-year profits, with investors opting to book profits instead of pushing the shares past their October 2016 highs.
Top performing sectors so far today
Industrial Metals & Mining 2,252.08 +2.60%
Personal Goods 37,116.58 +1.19%
Financial Services 10,653.24 +1.12%
Industrial Transportation 3,147.59 +0.81%
Mobile Telecommunications 5,119.13 +0.68%
Bottom performing sectors so far today
Oil Equipment, Services & Distribution 12,840.37 -10.51%
Fixed Line Telecommunications 3,610.22 -1.11%
Food Producers & Processors 8,658.13 -1.00%
Oil & Gas Producers 7,867.57 -0.96%
Electricity 9,038.84 -0.61%
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