Market report: Oil companies fall on Iraq fighting

Genel is likely to attempt to reassure investors about the security of its Kurdish operations when it posts half-year earnings tomorrow

Meanwhile, Afren, the Africa-focused explorer that also operates in Kurdistan, lost a further 7.1p to 107p, a 6.2pc decline, having crashed 26.1pc on Thursday after suspending its chief executive and chief operating officer

Both executives are being investigated over unauthorised payments, and in light of the unsettling turn of events, analysts at Canaccord Genuity downgraded their recommendation to “hold” and cut their target price to 120p, from 150p.

“The key question is whether Afren’s asset value is, or will be, significantly impaired,” they said.

A share sale by the explorer’s biggest investor put further pressure on the stock. Afren on Monday disclosed that Standard Life had cut its stake to 72.9m shares, from 87.4m. The disposal was made on the same day that Afren revealed the payments probe.

Among London’s smaller oil plays, there was demand for Bowleven, a favourite share of retail investors that added ½p to 38¾p after Cameroon officially gave the company permission to develop the Etinde permit off the coast of the African country.

Kazakhstan-focused Max Petroleum took on 0.270p, or 22pc, to 1.495p after securing £37.1m in funding from the Assaubayev family. The powerful local family has taken a 51pc stake in the explorer, having subscribed for shares at 1.64p a piece, a 33.9pc premium to Friday’s close.

But Tangiers Petroleum plunged 61.4pc, a loss of 4.375p to 2¾p, on confirmation that its highly-anticipated TA0-1 exploration well in Moroccan waters would be plugged and abandoned.

More broadly, the benchmark FTSE 100 stabilised after suffering heavy falls in recent trading sessions and closed almost unchanged, off 1.66 at 6,677.52. As with last week, earnings updates were a focus for the market.

Intertek, the product testing group, bounced off a two-year low to finish 173p better at £27.06 – the biggest blue-chip riser – following reassuring half-year numbers.

HSBC Holdings was another that was boosted by results, reversing an earlier dip to close up 5.7p at 635p, despite posting weaker than expected six-month pre-tax profits of $12.3bn. However, the bank told investors that it expected to benefit from a rise in interest rates in the UK, which it forecast would take place in the final three months of the year.

Earnings were also the major driver of stocks in the FTSE 250. Chemicals group Alent, 9.6p higher at 340p, and ground engineer Keller, up 14p and 889p, were both lifted by well-received interim figures. The former company further impressed with the announcement of a 15p a share special dividend.

Similarly, esure, the motor insurer, pleased by beating market forecasts with its half-year numbers and advanced 1.3p to 258½p.

Peer Direct Line, which was chased higher following earnings on Friday, remained in demand and rose 4.6p to 304p. Price target upgrades by analysts at Credit Suisse and Canaccord lent support to the stock, with Ben Cohen at the latter broker saying that “first-half results were impressive, given the headwind from winter weather”.

Finally, worries about the status of Quindell’s telematics contract with RAC sent the controversial insurance outsourcer down 23¾p to 181¾p.Weekend press reports suggested work on the contract had slowed amid disagreements between the two sides.

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