UK stocks start the year on the back foot with the FTSE 100 index falling 1.6% or 106 points to 6,622 giving up almost all of its post-Christmas gains.

Every sector except Tobacco is in the red this morning with Banks, Industrial Engineers, Miners and Oils providing the biggest drag on the index.

Best-performing stocks in the FTSE 100 are Imperial Brands (IMB) and retailers Next (NXT) and Marks & Spencer (MKS). Investors are waiting for Next's Christmas trading update tomorrow.

Bottom of the pile are miners Antofagasta (ANTO), BHP Billiton (BLT) and Glencore (GLEN) after a disappointing Chinese manufacturing number sent Asian markets lower.

ENERGY NAMES DOMINATE FTSE 250

In the FTSE 250, shares in mid-cap oil and gas explorer Ophir Energy (OPHR) jump 35% or 12.5p to 48.2p after the company reveals it is in bid talks with Indonesian resources firm Medco.

Medco has until the 28 January to announce whether it will make an official bid for Ophir but shareholders are already enjoying an almost £90m increase in the firm’s value today.

In the same sector Energean Oil & Gas (ENOG) announces a gas supply deal which could bring in as much as $900m of revenues.

The news sends the shares up 6% or 38p to 666p taking the firm’s market value to over £1 billion less than a year after it listed.

Energy stocks also feature on the losers list with Premier Oil (PMO) and EnQuest (ENQ) propping up the bottom of the FTSE 250.

Shares in Premier are down 7% or 5p to 62p while shares in EnQuest are down 9% or 2p to 20p. Both companies are heavily exposed to fluctuations in the price of crude thanks to their significant borrowings.

Also on the losing side is Debenhams (DEB) with the shares falling 6% or 0.3p to 4.8p giving it a market value of just £60 million against more than £360 million at the start of 2018.

In company news Faroe Petroleum (FPM:AIM) continues its spat with Norwegian bidder DNO with the release today of an independent valuation of its assets.

According to the press release the value of Faroe’s assets is estimated at between 186p and 225p per share or 22% to 48% more than DNO’s offer of 152p per share.

The valuation excludes the asset swap with Equinor announced in October which will lower Faroe’s tax rate going forward, and the company has yet again called DNO’s offer inadequate and ‘opportunistic’.

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Issue Date: 02 Jan 2019