Overview: the FTSE 100 declined 0.2% today after UK jobless claims were reported to have risen 2,300 in August, while the unemployment rate did not change from 4.5% in July.
Clothing retailer Next (LON:NXT) emerged atop the leaderboard with a gain of nearly 7%. Retailers Kingfisher (LON:KGF) and Marks & Spencer (LON:MKS) followed, climbing 3.5%. Beverage group SABMiller (LON:SAB) and defence and aerospace systems manufacturer BAE Systems (LON:BA) added just over 2%.
Gold miner African Barrick Gold (LON:ABG) was at the bottom of the pile with a 3.2% loss. Oil and gas supermajor BP (LON:BP) and banking group Barclays (LON:BARC) dropped 2.6% and 2.2% respectively.
US stocks were quick to recover from a negative start. The Dow Jones Industrial Average added 0.4%, while the broader S&P 500 index rose 0.15% and the technology heavy NASDAQ composite climbed 0.3%.
Commodities
Oil prices declined today after it was reported that Enbridge Energy Partners was green lighted to restart the Line A6 oil pipeline in Illinois after fixing a rupture that disrupted shipments of Canadian oil to refineries in the US Midwest.
Line A6 has a capacity of 0.67 million barrels per day, making it the largest pipeline connection Canada and the US.
When the news broke on Monday, oil futures added more than 1%, getting additional support from a bullish update on Chinese industrial output, which jumped 13.9% in August.
Yesterday’s crude oil inventories data form the American Petroleum Institute (API) put further pressure on oil prices, showing yet another massive gain of 3.3 million barrels.
A more closely watched report from the US Energy Information Administration (EIA) is due out later today. Last week, EIA reported a decrease of 2 million barrels in US crude stockpiles.
Movements in currency markets have been unfavourable for oil with the US dollar rising after Japan decided to sell yen in an attempt to bring the surge in the national currency under control. A stronger greenback makes crude more expensive for holders of other currencies, curbing demand.
October Brent Crude slid to US$78.60/barrel, while US light, sweet crude for October delivery dropped to US$75.42/barrel.
Blue chip oil and gas producers were in decline today. BP (LON:BP) dropped 2.6%, while fellow supermajor Shell (LON:RDSB) declined marginally, as did BG Group (LON:BG).
Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) each shed nearly 1%.
Amec (LON:AMEC) was sitting just below the opening level, while another oil and gas engineering firm Petrofac (LON:PFC) declined 2%.
Most midcaps were on the rise. JKX Oil & Gas (LON:JKX) and Melrose Resources (LON:MRS) led the way with gains of 2% and 1.7% respectively. Dana Petroleum (LON:DNX), Heritage Oil (LON:HOIL), Premier Oil (LON:PMO) and Salamander Energy (LON:SMDR) tacked on less than 1%.
Soco International (LON:SIA) was flat, while Dragon Oil (LON:DGO) lost 1%.
Services company Wood Group (LON:WG) retreated 2%.
Iraq focused oil and gas explorer Petrel Resources (LON:PET) was among the top risers in the sector with a 25% rally. Kurdistan focused oil and gas company Gulf Keystone (LON:GKP) advanced 8.5%.
Gold sets new record highs
Gold was slightly lower today shortly after posting fresh record highs at over US$1,270/oz. Traders were dumping gold to reap profits following yet another surge in the precious metal, which was sparked by the latest wave of concerns over the pace of the ongoing economic recovery, leading to an increase in safe haven demand.
Gold retreated to US$1,268/oz, while silver and platinum rose to US$20.50/oz and US$1,592/oz respectively.
Major mining stocks were in decline. Silver miner Fresnillo (LON:FRES) and gold miner Randgold Resources (LON:RRS) posted small losses, while platinum producer Lonmin (LON:LMI) dropped 1.7% and another gold miner African Barrick Gold (LON:ABG) retreated 3.2%.
Specialty chemicals firm Johnson Matthey (LON:JMAT) added nearly 1%.
Midcaps did better with gold miner Petropavlovsk (LON:POG) and Aquarius Platinum (LON:AQP) advancing 4.2% and 2.3% respectively. Silver producer Hochschild Mining (LON:HOC) added 1.6%.
South American focused mineral exploration and development company Minera IRL (LON:MIRL) was among the leading risers in the sector with a 12% advance. Investment holding company focused on gold and copper-gold prospects in Chile and Argentina, Mariana Resources (LON:MARL) followed with a 10.5% rally.
South America focused gold and silver explorer Patagonia Gold (LON:PGD) surged 8.5%.
Australia operating mining exploration company GGG Resources (LON:GGG) and owner of the Vatukoula Gold Mine in Fiji, Vatukoula Gold Miners (LON:VGM) added more than 7%.
Turkey and Saudi Arabia focused exploration company KEFI Minerals (LON:KEFI) also did well, tacking on 6.5%.
Base metals slide
Copper and nickel slid to US$3.43/lb and US$10.49/lb, while zinc dropped to US$0.959.
Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Kazakhmys (LON:KAZ) lost nearly 1%. Rio Tinto (LON:RIO) and Xstrata (LON:XTA) shed just over 1%. Eurasian Natural Resources (LON:ENRC) declined 2.2%.
Antofagasta (LON:ANTO) was flat, while Vedanta Resources (LON:VED) stood just above the opening level.
The only London listed pure iron ore producer Ferrexpo (LON:FXPO) was little moved.
Mineral resource exploration and development company focused on base metal projects in Russia Amur Minerals (LON:AMC) and Tunisia operating zinc, lead, silver, barite and fluorite explorer Maghreb Minerals (LON:MMS) led the juniors with gains of over 7%.
Australia operating gold and base metals explorer and developer Thor Mining (LON:THR) also did well, rising 5%.
Banks, insurance, private equity
HSBC (LON:HSBA) and Lloyds (LON:LLOY) stood just above the opening level.
Barclays (LON:BARC) moved in the opposite direction, shedding 2.2%. Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) posted small losses.
Admiral Group (LON:ADM), Legal & General (LON:LGEN) and Old Mutual (LON:OML) rose marginally, while Prudential (LON:PRU) and RSA Insurance Group (LON:RSA) rose 1.3%. Standard Life (LON:SL) led the sector with a 1.7% advance.
Aviva (LON:AV) was flat.
Private equity group 3i (LON:III) added less than 1%.
Small Cap Movers
Other notable movers among the small caps included African Diamonds (LON:AFD), which rallied 9%, and Latin America focused developer of rural electrification projects Rurelec (LON:RUR) with a 10% rally.
Small Cap News
Green Dragon Gas Ltd (LON:GDG) said it is extending its network of compressed natural gas (CNG) refuelling stations in China with the acquisition of 25 new sites in Henan Province for an initial US$15 million.
African Eagle Resources (LON:AFE) this morning unveiled plans to raise £3.3 million that will bankroll work on its Dutwa nickel laterite project in Tanzania. The company is issuing 88 million new shares at 3.75p each. Yesterday’s closing price was 4.25p.
Minera IRL (AIM:MIRL, TSX:IRL) has found "substantial near surface gold and silver mineralisation" at the Escondido project in Patagonia. The exploration target is an extension of neighbouring Calandria Sur discovery owned by Mariana Resources (LON:MARL).
Helius Energy (LON:HEGY) can finally press on with its plans for a biomass plant at Avonmouth Dock on the Bristol Channel after protestors failed with a last ditch legal challenge. The High Court in Cardiff refused the Coedbach Action Team permission to apply for a judicial review of the project.
Gem Diamonds Ltd (LON:GEMD) said its Kimberley Diamond Company NL unit has negotiated a 25 percent price increase for the exclusive assortment of rare fancy yellow diamonds from Kimberley's Ellendale mine in Western Australia to high-end jeweller Tiffany & Co.
Petrel Resources (LON:PET) has taken steps to hedge itself against the continued political turbulence in its main country of operation, Iraq, taking advantage of a low cost opportunity to enter a prolific oil block in Ghana.
Shares in Shanta Gold (LON:SHG) surged 14% this morning after the mining company said that the “exceptional” results from the first two drill targets at its Chunya project raised its expectations of successfully delineating an increased resource.
West Africa focused oil and gas exploration group Bowleven (LON:BLVN) has commenced drilling operations on the Sapele-1 exploration well on block MLHP-5 in Cameroon, marking the beginning of its exploration campaign in the Douala basin.
Ambrian Capital issued a note on African Aura Mining (LON:AAAM), saying it now rates the group as the AIM small-cap miner most likely to double in price in the coming 12 months on account of the raft of newsflow now expected to follow.
Synchronica (LON:SYNC) said the proposed offer to acquire iseemedia (TSX-V:IEE), has been taken up by shareholders representing in excess of 74 percent of the total issued and outstanding shares of iseemedia as of September 14, sufficient for Synchronica to take control of the business.
African Aura Mining (LON:AAAM) announced that the government of Liberia has granted a Mineral Development Agreement (MDA) for the Putu iron ore project. The 25 year agreement sets the fiscal regime and social development conditions for the mining and development of the Putu iron ore project in eastern Liberia. The agreement is extendable in line with the life of mine.