(Updating with full report)
OSLO (Thomson Financial) - Share prices closed lower, dragged down by overnight falls on US markets, with Renewable Energy Corporation (REC) and Seadrill falling on signs of weaker demand.
The OSEBX Benchmark index closed 3.51 points lower at 505.83, while the OSEAX All Share index shed 3.66 points to 584.66.
Total turnover amounted to 9.10 bln nkr.
'(Today's falls are) all down to the US markets, and both Seadrill and REC have outperformed recently, so they're falling back further now on signs of weaker demand,' an analyst said.
Renewable Energy closed 6.75 nkr lower at 236.25, extending recent falls as the market sees weakening demand for solar energy products, dealers said.
Seadrill shed 3 to 123.5, extending recent falls. The group is to sell its 1981-built jack-up rig 'West Titania' to Nigerian drilling contractor SeaWolf Oil Services in a deal worth 146.5 mln usd.
Fred Olsen Energy added 2 to 298 as hopes of a rebound by the stock outweighed a recommendation cut by Nordea Markets, dealers said.
Shares in FOE are currently down 4.2 pct over the last month, a period during which the OSEBX has jumped 2 pct, and brokers in Oslo say that it appears that some fund houses are hoping for a rebound in the stock.
'Fred Olsen's underperformed by quite a lot recently, so I think some people are having a bet on it rebounding, given the Transocean merger and other positive factors,' on analyst said.
This sentiment, he said, was outweighing a note from Nordea, in which it said it has cut FOE to 'hold' from 'buy', whilst reducing its price target to 318 nkr from 330, after last week's 'disappointing' earnings.
The broker noted that investment costs were revised upwards by 120 mln usd due to upgrades of two rigs.
Additionally, the broker said, it also believes that FOE's aging fleet has been one of the reasons why the stock has not risen in line with other rig companies' shares on Monday after the news about the Transocean buy of GlobalSantaFe.
'FOE's fleet is less attractive from a merger point of view,' Nordea said.
Frontline shed 11 to 274.
Petroleum Geo-Services was down 2.25 at 138.5 ahead of the seismic firm's second-quarter results tomorrow, and after a warning from Carnegie that investor hopes could have become excessive, dealers said.
Analysts have already said they are expecting a record quarterly performance from PGS, which is benefiting from strong demand from its services due to the continued strength of the oil price.
However, some analysts are beginning to warn that PGS's valuation has become excessive, with Carnegie this morning advising investors to 'take profits ahead of figures'.
According to TDN Finans, the market consensus is for PGS to report second quarter operating profits of 129 mln usd, up from 89.8 mln a year ago, on sales of 361 mln usd, ahead of last year's 310.4 mln.
Subsea 7 rose 0.5 to 143 after yesterday's losses, and after Carnegie hiked its fair value price target on the stock to 160 nkr from 135 to reflect expected major contract awards in West Africa by the end of the year.
This, the broker said, 'will provide a catalyst' to fuel the shares towards its new price target. Carnegie has a 'neutral' recommendation on Subsea 7.
Norsk Hydro rose 0.5 to 234 and Statoil was unchanged at 178, while Prosafe shed 1.4 to 93 and Golar LNG fell 4.5 to 106.5.
Havila Shipping was unchanged at 112. The stock will be traded ex-dividend of 3.50 nkr tomorrow.
Scorpion Offshore rose 1.5 to 75.5 after the group raised 49 mln usd via a private placement of 3.8 mln shares at a price of 73.50 nkr each.
Among other stocks traded today, Norske Skog was down 0.1 at 85.5, Yara International shed 1.25 to 161.25, Aker Yards fell 2.25 to 69, Telenor was down 1 at 110, DnB NOR shed 0.5 to 79.7 and Orkla was 2.75 lower at 111.25, while Aker Kvaerner added 2 to 163 and Storebrand was 0.5 higher at 93.1. michael.delaine@thomson.com mdl/am COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
© 2007 AFX News
