Overview: the FTSE 100 inched lower from the opening level, but managed to hold on to the 5,700 mark amid mixed economic reports, which were released today. US consumer spending was reported to have increased 0.3% in February after rising 0.4% in the previous month, while personal income was flat.
Swiss miner Xstrata (LSE: XTA) and mobile operator Vodafone (LSE: VOD) led the blue chips with gains of nearly 3%. Other notable risers included hedge fund manager Man Group (LSE: EMG), which added almost 2% and commercial property company British Land (LSE: BLND), communications group WPP (LSE: WPP) and utility company Severn Trent (LSE: SVT), which all tacked on slightly more than 1%.
Hospitality company Whitbread (LSE: WTB) was at the bottom of the pile with a 3% loss. Fashion house Burberry (LSE: BRBY) and broadcaster BSkyB (LSE: BSY) both declined 2%. Quality and safety services provider Intertek (LSE: ITRK) and software developer Autonomy Corp (LSE: AU) were down 1.4%, while interdealer broker ICAP (LSE: IAP) pulled back 1%.
US stocks opened higher today. The Dow Jones Industrial Average advanced 0.4%, the broader S&P 500 index climbed 0.5% and the technology heavy NASDAQ composite added 0.45%.
Commodities
Crude was higher today, mostly due to a weaker US dollar. The American currency has been in decline against the euro since Friday, when European leaders reached an agreement on a rescue package for Greece to provide the troubled country and Europe’s single currency with immediate relief and improve the outlook for Europe’s debt crisis. The euro extended gains today, pushing the US dollar further down to make dollar-denominated commodities such as crude cheaper for holders of other currencies.
Oil got some support by an improved demand outlook amid a rally in European and Asian stock markets late last week and bullish US jobless claims data that showed a steeper than expected decline of 14,000 in initial jobless claims last week to 442,000. The recovery in the commodity market, however, was stopped by the downward revision of US GDP growth in the final quarter of 2009 that was announced on Friday, showing a drop from 5.9% to 5.6%.
Investors will be looking to the US employment data, which is due out on Friday.
May Brent Crude improved to US$81.24/barrel, while US light, sweet crude reached US$82/barrel.
Blue chip oil and gas producers didn’t show much movement today. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) shed less than 1%, as did BG Group (LSE: BG), while Tullow Oil (LSE: TLW) was flat and another FTSE 100 constituent Cairn Energy (LSE: CNE) added nearly 1%.
Amec (LSE: AMEC) was flat, while fellow oil and gas engineering firm Petrofac (LSE: PFC) lost 1%.
Midcaps were mixed. Dana Petroleum (LSE: DNX), Melrose Resources (LSE: MRS) and Heritage Oil (LSE: HOIL) were in decline, shedding 2.3%, 1.6$ and 1% respectively. Premier Oil (LSE: PMO) and Salamander Energy (LSE: SMDR) were flat, while Dragon Oil (LSE: DGO) gained less than 1%.
Soco International (LSE: SIA) and JKX Oil & Gas (LSE: JKX) outperformed their peers, climbing 2.1% and 1% respectively.
Services companies headed in different directions as while Wood Group (LSE: WG) posted a small loss, Wellstream Holdings (LSE: WSM) advanced 1.5%.
Irish oil and gas exploration company Petroceltic International (AIM: PCI) was one of the best performers in the sector, advancing 9.5% after raising US$120 million. Africa focused energy company Dominion Petroleum (AIM: DPL) also did well, climbing 4%.
Mongolia-focused Petro Matad Ltd (AIM: MATD), North America focused oil & gas junior Pantheon Resources (AIM: PANR) and Europe focused oil and gas developer Ascent Resources (AIM: AST) headed in the opposite direction, sliding 8.4%, 7% and 5% respectively.
Gold climbs to $1,111 as US dollar weakens
Gold was in buying mode today, clearing US$1,110/oz just a few days after slipping below US$1,090/oz. Gold was supported by today’s report from the World Gold Council (WGC), which predicted China’s gold demand to double in tonnage terms within the next decade after growing at an annual rate of 13% over the past five years.
The WGC estimates that China’s annual demand could amount to US$29 billion in current prices.
Gold improved to US$1,111/oz today, while silver and platinum advanced to US$17.25/oz and US$1,611/oz respectively.
Platinum producer Lonmin (LSE: LMI) was the best performer in the mining sector today, gaining 1.5%. Gold miner Randgold Resources (LSE: RRS) added nearly 1%, while silver miner Fresnillo (LSE: FRES) posted a marginal decline.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) was sitting just below the opening level.
Aquarius Platinum (LSE: AQP) led the midcaps with a 1.2% climb. Silver producer Hochschild Mining (LSE: HOC) and gold miner Petropavlovsk (LSE: POG) shed less than 1%.
Africa operating gold miner GMA Resources (AIM: GMA) and Western Australia operating Norseman Gold (AIM: NGL) led the juniors, rallying 13.5% and 12% respectively. Turkey and Ethiopia operating gold miner Stratex International (AIM: STI), which today reported positive geochemistry results at its Megenta gold deposit in Ethiopia, surged 7.5%.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Africa focused gold miner Pan African Resources (AIM: PAF) retreated 6% and 5%.
Copper and nickel rise to lift miners
Base metals were on the rise today. Copper advanced to US$3.48/lb, while nickel stood at US$10.73/lb after rallying to US$11/lb earlier today. Zinc reached US$1.03/lb.
Xstrata (LSE: XTA) led the pack with a 2.5% advance. Antofagasta (LSE: ANTO) and Rio Tinto (LSE: RIO) followed, climbing 1.4% and 1.2%. Kazakhmys (LSE: KAZ) added 1%. Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) tacked on less than 1%.
Eurasian Natural Resources (LSE: ENRC) and Vedanta Resources (LSE: VED) posted small losses.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was sitting just below the opening level.
Iron ore focused investor Red Rock Resources (AIM: RRR) and copper and nickel explorer Regency Mines (AIM: RGM) led the small caps, surging 16% and 10% respectively. Indonesia operating coal miner Churchill Mining (AIM: CHL) gained 4.5% after releasing its interim results.
Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) and Tunisia focused metal miner Maghreb Minerals (AIM: MMS) slipped 9% and 6.5% respectively.
Banks, insurance, private equity
Royal Bank of Scotland (LSE: RBS) was at the bottom of the banking sector, sliding 2.7%. Standard Chartered (LSE: STAN) and Lloyds (LSE: LLOY) lost 1.7%, Barclays (LSE: BARC) was down 1.2% and HSBC (LSE: HSBA) lost 1%.
Most insurers were in buying mode today. Legal & General (LSE: LGEN) was in the lead, gaining 2.2%. Admiral Group (LSE: ADM), Aviva (LSE: AV) and RSA Insurance Group (LSE: RSA) tacked on less than 1%, while Old Mutual (LSE: OML) and Prudential (LSE: PRU) were flat and Standard Life (LSE: SL) retreated 1.1%.
Private equity group 3i (LSE: III) posted a small loss.
Small Cap Movers
Other notable movers among the small caps included UK based electrical components producer and supplier Cinpart (AIM: CINP), which added 5.3% and mobile email and data synchronisation group Synchronica PLC (AIM: SYNC), which lost 10%.
Small Cap News
Renovo Group (LSE: RNVO) reported another milestone in the development of its Juvista - a drug which reduces scarring by enhancing tissue regeneration – announcing that it had now completed recruitment of patients for the crucial EU Phase III trial.
Petroceltic International (AIM: PCI) said it has conditionally raised £81m through the placing of approximately 635m new shares at 12.75p each. The proceeds will be used to support the company’s appraisal programme in Algeria and also fund drilling in Italy.
Discovery Metals (AIM: DME; ASX/BSE: DML) has received Scoping Study results from Snowden for an underground mine based on a portion of the currently defined Zeta Mineral Resource and deposit at the Boseto Copper Project on a standalone basis, that confirms the economic viability of underground mining operations at Zeta.
Norseman Gold PLC (AIM, ASX: NGL) said it was notified that non-executive director David Steinepreis last week bought 56,750 shares in the company on the market for a total of A$39,965, and he now holds 4,313,857 shares in Norseman.
Medusa Mining (ASX, AIM: MML), through its Philippines operating company Philsaga Mining Corporation, has announced an update of the Co-O mine surface drilling results for new holes MD 217 to MD 240 and some additional results from earlier holes received subsequent to the announcement of 17 December 2009.
Rambler Metals & Mining PLC (TSX-V: RAB; AIM:RMM) said it plans to raise approximately £2.7 million before expenses through a private placing of up to 8.6 million shares at 32 pence each, or approximately C$0.50 per share.
Stratex International (AIM: STI) has doubled its Ethiopian portfolio to 3,142 sq km (square kilometres) while reporting encouraging geochemistry results from its Megenta gold discovery in the Afar region of the country, with chip sampling returning grades of up to 3 g/t (grammes per tonne) gold.
In ist first-half results statement, Churchill Mining (AIM: CHL) said the development of its world-class East Kutai coal project (EKCP) in Indonesia continues to gather momentum. During the six months ended 31 December 2009, the company completed a maiden in-situ mining reserve of almost one billion tonnes of thermal coal and completed the project’s initial feasibility study.
Kenmare Resources (LSE: KMR) the open offer of its £179.6m placing and open offer fundraising announced earlier this month for its Moma titanium minerals mine in Mozambique received a take-up of 73.5% from qualifying shareholders.
Frontier Mining (AIM: FML) has received assay results for its first 3 holes of its infill drill programme at its Benkala copper project in north-western Kazakhstan. The main focus of the programme was to confirm the oxide section of the project, enabling Frontier to prepare for initial copper production using an SX-EW process. The first three holes, from the 54 hole program, have exceeded Benkala’s historic resource data.
Noventa (AIM: NVTA) confirmed that it will re-start production at its Marropino mine in Mozambique on or around 25 April 2010. The production will be phased in with a three-stage process, beginning with the re-processing of mine tailings, followed by the processing of previously mined oversize material, and finally the processing of new material from the main ore body (Run-of-Mine).
Caza Oil & Gas (TSX: CAZ; AIM: CAZA) responded to lower gas prices by growing production and cutting expenses to bring down pretax losses for full year 2009, while shifting focus on its oil exploration projects.
The speculative Falkland Islands oil-exploration play suffered a considerable blow this morning after the Liz 14/19-1 well, drilled through a JV between Desire Petroleum (AIM: DES) and Rockhopper Exploration (AIM: RKH), returned disappointing results. The primary Liz target was encountered at around 2,550 metres, with indications of hydrocarbons while drilling, however subsequent logging operations have shown that whilst oil may be present in thin intervals, the reservoir quality is poor.
Xtract Energy (AIM: XTR) said its 50% owned Turkish subsidiary Extrem Energy AS has extended its license over the Candarli Bay area in Turkey until October 2012 and hired a marketing firm to find a farm-out partner for the project, while preparing to production test the Sarikiz-3 well after identifying a number of promising levels via analysis of the wire-line logs and other well data.
In a note on S&U (AIM: SUS), Brokerlink said that the company has demonstrated its resilience with its full-year results for 2009, announced last week. The niche personal-finance company reported a 9% increase in profitability and 10% earnings per share growth in the year to 31 January 2010.
Quadrise Fuels International PLC (AIM: QFI) reported narrowing losses for the first half, and said it is particularly pleased to be making progress in the marine fuel sector through its agreement with A.P. Moller-Maersk which was announced four weeks ago.
Rurelec’s (AIM: RUR) 50.001 percent controlled Bolivian unit, Empresa Guaracachi SA (Guaracachi), has released an annual report, discussing the company’s strong relationship with the Bolivian government and its role in the development of Bolivia’s economy. Additionally, Guaracachi commented on the planned completion of its combined cycle gas turbine (CCGT) project in Santa Cruz.
Plant Impact (AIM: PIM) said it was notified that Gartmore has increased its shareholding in the group. The investment management firm, through its units Gartmore Fund Managers Ltd and Gartmore Investment Ltd, now holds 6,233,986 shares, or total 13.655% of the company.