Overview: the FTSE 100 declined 0.3% today as investors were cautious ahead of tomorrow’s US jobless claims, manufacturing and personal consumption data.
Plumbing and heating equipment manufacturer Wolseley (LON:WOS) led the blue chips with a 6% rally. Oil and gas supermajor BP (LON:BP) and turbine manufacturer Rolls-Royce (LON:RR) climbed 3.5%. Engineering company Weir Group (LON:WEIR), caterer Compass Group (LON:CPG) and insurer Admiral Group (LON:ADM) followed with gains of 2%. Medical devices manufacturer Smith & Nephew (LON:SN) and cruise operator Carnival Corp (LON:CCL) tacked on 1.5%.
Base metal miner Vedanta Resources (LON:VED) was at the bottom of the pile with a 4% decline. Satellite telecommunications company Inmarsat (LON:ISAT), pharmaceutical company AstraZeneca (LON:AZN) and bank HSBC (LON:HSBA) followed with losses of 2%. Software developer Sage Group (LON:SGE) and engineering firm Smiths Group (LON:SMIN) shed just over 1.5%.
US stocks were off to a negative start. The Dow Jones Industrial Average and the broader S&P 500 index lost 0.2%, while the technology heavy NASDAQ composite slid 0.1%.
Commodities
Oil rises on Asian data
Oil prices were on a rise today on signs that the demand in the US is picking up.
The American Petroleum Institute (API) released an inventories report on Tuesday, revealing a surprisingly large drop of 2.4 million barrels.
API added that distillates, which include diesel and heating oil, decreased by 2.8 million barrels, while gasoline stocks added 3 million barrels.
A more closely watched report from Energy Information Administration (EIA) will be released tomorrow.
A Platts survey predicted crude oil inventories to add 2.2 million barrels.
Today’s update on Chinese manufacturing provided more support for commodities. HSBC (LON:HSBA) reported that its China PMI (purchasing managers index) rose from 51.9 to 52.9 in September, marking a second straight monthly industrial expansion.
However, the falling US inventories and the upbeat news from Asia provided enough of a boost to push the prices up, easing concerns over the waning demand from the world’s largest energy consumer.
November Brent Crude reached US$79.07/barrel, while US light, sweet crude for November delivery rose to US$76.44/barrel.
BP (LON:BP) led the blue chip oil producers with a 3% advance. Fellow supermajor Shell (LON:RDSB) posted a small loss, as did Cairn Energy (LON:CNE).
BG Group (LON:BG) declined 1.3% and Tullow Oil (LON:TLW) was flat.
Amec (LON:AMEC) stood just above the opening level. Another oil and gas engineering firm, Petrofac (LON:PFC), lost 1.1%.
Midcaps weren’t very active today. Dana Petroleum (LON:DNX), Premier Oil (LON:PMO), Salamander Energy (LON:SMDR) and Soco International (LON:SIA) were little moved.
Dragon Oil (LON:DGO) moved into the negative with a 1.3% loss. Heritage Oil (LON:HOIL) declined marginally.
Melrose Resources (LON:MRS) and JKX Oil & Gas (LON:JKX) did better, rising 2% and 1.5% respectively.
Services companies Wood Group (LON:WG) and Wellstream Holdings (LON:WSM) posted small losses.
US focused explorer and producer Caza Oil & Gas (LON:CAZA) and energy sector focused investor Xtract Energy (LON:XTR) were among the top performing juniors with gains of 16% and 8% respectively.
Gold remains above $1,300
Gold was moving within a narrow range above the US$1,300/oz level today, benefiting from the declining stock markets in Europe and the US as well as a decline in the US dollar against the euro.
Gold stood at US$1,307/oz. Silver and platinum rose to US$20.76/oz and US$1,647/oz respectively.
Gold producers Randgold Resources (LON:RRS) and African Barrick Gold (LON:ABG) posted small losses, as did platinum miner Lonmin (LON:LMI).
Silver miner Fresnillo (LON:FRES) did better, tacking on nearly 1%.
Midcaps Aquarius Platinum (LON:AQP) and silver producer Hochschild Mining (LON:HOC) were sitting just below the opening level. Gold miner Petropavlovsk (LON:POG) lost 2.5%.
Diversified mining investment company Electrum Resources (LON:ECR) was among the top risers in the sector, rallying 24%. Copper and gold explorer Solomon Gold (LON:SOLG) followed with a 21% surge. Australia operating mining exploration company GGG Resources (LON:GGG), gold and high value base metals focused exploration and development company Stratex International (LON:STI) and diamond producer Stellar Diamonds (LON:STEL) climbed 16%, 15% and 12% respectively.
Turkey and Saudi Arabia operating explorer KEFI Minerals (LON:KEFI) joined the party, rising 11%.
Copper and gold focused exploration and development company EMED Mining (LON:EMED) and investment holding company Mariana Resources (LON:MARL) advanced 9.5% and 7% respectively.
Miners slide
Copper rose to US$3.62/lb, while nickel and zinc held steady at US$10.50/lb and US$0.983/lb respectively.
Most mining stocks were in decline. BHP Billiton (LON:BLT), Kazakhmys (LON:KAZ) and Rio Tinto (LON:RIO) posted small losses, while Anglo American (LON:AAL) and Xstrata (LON:XTA) declined 1.2% and 1.5% respectively.
Vedanta Resources (LON:VED) slipped 4.2%.
Antofagasta (LON:ANTO) and Eurasian Natural Resources (LON:ENRC) added less than 1%.
Swiss-headquartered resources company with assets in Ukraine Ferrexpo (LON:FXPO) advanced 2.8%.
Mozambique operating tantalum miner Noventa (LON:NVTA) led the small caps with a 20% surge.
Banks, insurance, private equity
Banking stocks were in decline today. HSBC (LON:HSBA) dropped 2%, while Barclays (LON:BARC) and Lloyds (LON:LLOY) declined 1.5%. Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) each shed 1%.
Insurance companies did slightly better. Admiral Group (LON:ADM) and Aviva (LON:AV) advanced 2% and 1.4%. Old Mutual (LON:OML) and Standard Life (LON:SL) added less than 1%.
Prudential (LON:PRU) and RSA Insurance Group (LON:RSA) declined marginally.
Legal & General (LON:LGEN) was flat.
Private equity group 3i (LON:III) moved down 1%.
Small Cap News
Cluff Gold's (LON:CLF, TSX:CFG) transformation from junior explorer to profitable, cash generating gold producer was underlined by a strong set of interim results today. The update also revealed the company's founder, Algy Cluff, is to relinquish the role of chief executive and cede day-to-day control of the business to chief operating officer Peter Spivey.
THE spectre of Whitehall spending cuts appears to be haunting shares in Advanced Computer Software (LON:ASW). Yet as the recent trading update revealed, the business remains resilient and on course to beat profit forecasts.
David Bramhill, the founder and managing director of Nighthawk Energy (LON:HAWK, OTCQX: NHEGY), has announced his intention to retire from the board with immediate effect. He will be succeeded as boss by commercial director Tim Heeley.
SmartFOCUS (LON:STF) is confident it will continue its profitable growth for the remainder of 2010 and beyond, says chief executive Chris Underhill in the group's first half results statement. In the first six months of the year the company doubled pretax profit.
Synchronica (LON:SYNC) has completed an order from a major phone manufacturer for certification and licensing of its instant messaging software, which will now be pre-installed on six models of mobile handsets. The initial order is worth US$48,000.
Northern Petroleum (LON:NOP) today reported a substantial increase in interim revenues due to new gas production, expecting to further improve its financial performance in the near term. Revenues more than doubled from €2.8 million to €7 million, helping the company make a €2.3 million pre-tax profit after posting a loss of €0.5 million a year ago.
TyraTech (LON:TYR), the AIM-listed maker of eco-friendly pesticides, said potentially transformational projects with Terminix of the US and food giant Kraft are progressing well. The update was given alongside the company’s interim results, which showed that operating expenses had been cut by 45 per cent in the period.
Ascent Resources (LON:AST) has completed the sale of its non-core Swiss assets, securing more cash and wrapping up what is perceived as a win-win deal by broker and investors. The disposal was completed after Ascent satisfied the commercial conditions required for the receipt of the €3 million in additional cash after receiving the initial cash consideration of €5 million at the time of the sale.
Caza Oil & Gas (AIM:CAZA; TSX:CAZ) shares jumped around 30% in early trade after initial tests on a new well indicated "multiple potential pay sands". The joint ventured Caza 158 well was drilled on the Windham Wolfberry prospect. After this initial success the partners are now drilling the next well in the programme, the Caza 162 well, which will test the western portion of the prospect.
Nyota Minerals (LON:NYO, ASX:NYO)has raised £21.58 million to fund the fast tracking of its flagship Tulu Kapi gold deposit in Ethiopia to move it to production “as quickly as possible”. Part of the funds will also be used to carry out a regional exploration programme to discover more economic ore bodies.
Patagonia Gold (LON:PGD) managing director Bill Humphries said the company has already made considerable progress in 2010. During the first six months of the year, ended June 30 2010, The company raised £13 million, began mine construction at Lomada de Leiva and expanded its defined resources in Santa Cruz province in Argentina.
Red Rock Resources (LON:RRR) has boosted its working capital with £600,000 after placing 10 million shares at 6 pence. Edison Investment Research has recently stated that Red Rock shares could potentially be worth 20 pence, offering an upbeat outlook after analysing the progress the company made during summer.
Europa Oil & Gas (LON:EOG) expects to report full-year oil production revenues of 3.1 million. The company said this would be broadly in line with analyst expectations. However Europa said that exceptional items will cause pretax profits to be lower than anticipated.
Shanta Gold (LON:SHG) has successfully raised US$20 million to fund the development of the Luika gold mine in Tanzania and advancing its exploration programmes. Shanta placed 51 million new shares at 25 pence per share, representing 28.6% of the company’s enlarged share capital.
Frontier Mining (LON:FML) said its outlook is extremely positive after it made significant progress in the first half, despite the period being traditionally quieter due to the normal winter closure of operations. “Excellent progress has been made so far in 2010 at all active deposits,” said Frontier chief executive Erlan Sagadiev.
Xcite Energy (LON:XEL,TSX-V: XEL) said that drilling operations have begun on the 9/3b-R pilot well on the Bentley field in the UK North Sea.
Electrum Resources' (LON:ECR) market value is deeply discounted to its ‘sum of its parts’ according to Edison’s head of mining research, Charles Gibson. The company formally changed it name from Mercator Gold today.
GGG Resources (LON:GGG) chairman Peter Ruxton said the first half of 2010 was an ‘active, exciting and fruitful period’ for the company, after it committed to the development of the Bullabulling project.