London midday: Travel stocks lift markets higher after Iran deal

25th Nov 2013 11:18

- Markets hail Iran accord over nuclear programme- Oil, gold prices drop after Iran deal- US markets set to extend record highstechMARK 2,654.27 +0.46%FTSE 100 6,695.66 +0.32%FTSE 250 15,292.96 +0.69%News of a deal constraining Iran's nuclear programme gave equity markets a lift on Monday morning, with travel stocks performing particularly well as the price of oil declined.Iran and the so-called P5+1 nations of Russia, China, France, Germany, the UK and the US came to an interim agreement over the weekend limiting Iran's nuclear developments in exchange for the easing of economic sanctions. The deal will run for the next six months as both sides work on a final agreement.Iran is home to the world's fourth-largest oil reserves but its exports have been affected by tough sanctions. The nation will not be allowed to increase its oil sales for six months but the deal has relieved tensions in the oil producing region of the Middle East.Brent for January delivery was trading as much as 3% lower on the ICE Future Europe exchange this morning, its biggest intraday fall since the start of the month. By mid-morning, it was down 1.67% at $109.19 a barrel."The deal is a major step forward in the negotiations on Iran's nuclear programme following a decade of struggles," said analyst Jens Nærvig Pederson from Dankse Bank."As Iran is not allowed to increase its oil exports, the effect [on oil prices this morning] probably reflects relief in the market that the sides are finally moving closer together and an expectation that the momentum will continue to grow."Another record close for US benchmarks on Friday was also feeding into the stronger morning in London, as the Dow Jones Industrial Average and S&P 500 both marked seven straight weeks of gains. US stock futures were pointing to a firmer start after the opening bell later on.However, Chief Market Analyst Michael Hewson from CMC Markets warned: "Volumes this week could [...] suffer as a result of the Thanksgiving holiday in the US on Thursday as we head into the end of the month."Travel stocks rise as oil prices slipTravel stocks such as easyJet, IAG, Carnival and Thomas Cook were making gains on Monday as the price of oil fell following the Iran deal.Jefferies raised its rating for easyJet this morning from 'hold' to 'buy', saying that after a pause for breath over the summer, "we are now increasingly confident of a return to share-price outperformance". The broker also lifted its target price for the stock, along with IAG.Petrofac, the oil and gas services provider, rose strongly after saying that its 50/50 joint venture (JV) with Korean based Daelim Industrial has been awarded a $2.1bn engineering, procurement and construction contract by Oman Oil Refineries and Petroleum Industries. BP was lower after the US judge overseeing the entire civil liability trial arising from the Gulf of Mexico oil spill criticised the company's "deeply disappointing" attempt to block what it sees as excessive compensation payments.Oil peers Shell, Tullow and BG Group were also out of favour this morning as crude prices weakened significantly. Similarly, gold producers Randgold Resources, Centamin, Hochschild Mining and African Barrick Gold were in the red with the price of the precious metal trading near a four-month low as the demand of safe-haven assets reduced.Engineering services giant Babcock fell after revealing that it is in discussions about setting up a "joint venture" with helicopter firm Avincis, which press reports have suggested could include a partial or even full buy-out. Numis and Panmure Gordon were weighing on the shares this morning after both downgrading their recommendations from 'buy' to 'hold'.Defence group Chemring surged after saying that expectations for the financial year ended October 31st remain in line with previous guidance despite the adverse market backdrop.Power plant operating and oil group Essar Energy sank after seeing first-half core profits fall 7% to $543.7m due to a weak Indian rupee.Meanwhile, pork producer Cranswick gained after beating forecasts with its interim results as first-half pre-tax profits rose 16% to £26.1m.FTSE 100 - RisersInternational Consolidated Airlines Group SA (CDI) (IAG) 372.80p +2.76%Compass Group (CPG) 927.50p +1.92%Unilever (ULVR) 2,508.00p +1.83%ARM Holdings (ARM) 1,009.00p +1.82%William Hill (WMH) 374.70p +1.79%Reckitt Benckiser Group (RB.) 4,929.00p +1.69%Petrofac Ltd. (PFC) 1,211.00p +1.68%Carnival (CCL) 2,265.00p +1.66%easyJet (EZJ) 1,428.00p +1.64%Schroders (SDR) 2,477.00p +1.47%FTSE 100 - FallersRandgold Resources Ltd. (RRS) 4,246.00p -2.66%Babcock International Group (BAB) 1,292.00p -2.49%Vedanta Resources (VED) 880.50p -1.62%Tullow Oil (TLW) 877.50p -1.07%Associated British Foods (ABF) 2,272.00p -0.83%Severn Trent (SVT) 1,799.00p -0.72%BG Group (BG.) 1,250.50p -0.71%BT Group (BT.A) 374.40p -0.45%BP (BP.) 491.50p -0.40%Rio Tinto (RIO) 3,181.50p -0.39%FTSE 250 - RisersChemring Group (CHG) 217.00p +11.63%Cranswick (CWK) 1,148.00p +4.36%IP Group (IPO) 164.50p +3.98%Oxford Instruments (OXIG) 1,470.00p +3.59%Ultra Electronics Holdings (ULE) 1,869.00p +3.43%Carpetright (CPR) 605.00p +3.33%Supergroup (SGP) 1,145.00p +2.97%Tullett Prebon (TLPR) 323.40p +2.93%Playtech (PTEC) 676.00p +2.89%Worldwide Healthcare Trust (WWH) 1,224.00p +2.86%FTSE 250 - FallersEssar Energy (ESSR) 95.10p -5.47%Centamin (DI) (CEY) 44.87p -5.16%African Barrick Gold (ABG) 165.90p -3.43%Hochschild Mining (HOC) 126.10p -2.63%Moneysupermarket.com Group (MONY) 173.90p -2.03%Lonmin (LMI) 307.90p -1.38%Polymetal International (POLY) 517.00p -1.34%Kenmare Resources (KMR) 18.65p -1.06%Michael Page International (MPI) 452.90p -0.98%Spirent Communications (SPT) 100.30p -0.89%BC