Overview: the FTSE 100 declined today after closing at a 29 month high on Friday. The UK’s blue chip index stood 0.45% below the opening level in the last hour of trading as mining and oil and gas companies weighed after oil and metal prices declined on a stronger US dollar.
Caterer Compass Group (LON:CPG) emerged at the top of the leaderboard with a 3% gain. Satellite telecommunications company Inmarsat (LON:ISAT) and engineering firm Invensys (LON:ISYS) added just over 2%. Publisher Reed Elsevier (LON:REL) and mining major Vedanta Resources (LON:VED) added just over 1.5%. broadcaster BSkyB (LON:BSY) climbed 1.2%.
Royal Bank of Scotland (LON:RBS) was at the bottom of the pile with a 3.2% loss. Broker Nomura today reiterated its “reduce” recommendation for RBS, predicting it to report a £1.8 billion profit for the third quarter. Government services company Serco (LON:SRP) declined 2.6%. Mining company Anglo American (LON:AAL) and telecom group BT (LON:BT.A) lost nearly 2%.
US stocks were off to a negative start. The Dow Jones Industrial Average and the S&P 500 index lost 0.5%, while the technology heavy NASDAQ composite was flat.
Commodities
Oil prices fall
Commodities were tracking movements in currency markets today.
After rising in the morning, crude oil futures declined later in the session after traders started pouring money into the US dollar on the back of the strong employment data released by the Labor Department on Friday.
Non-farm payrolls rose by more than projected with the Labor Department’s numbers showing a 151,000 gain in October, while analysts polled by Dow Jones Newswires expected to see 60,000 new jobs added during the month.
US light sweet crude for December delivery declined to US$86.64/barrel, while January crude fell to US$87.28/barrel on the New York Mercantile Exchange (NYMEX).
On the ICE Exchange, December Brent Crude dropped to US$87.70/barrel. Brent for January last traded at US$87.95/barrel.
Blue chip oil producers were in the red today, albeit with small losses. Cairn Energy (LON:CNE) declined marginally, as did BP (LON:BP), while fellow supermajor Shell (LON:RDSB) dropped 1.2%.
BG Group (LON:BG) and Tullow Oil (LON:TLW) advanced 1% and 1.6% respectively.
Petrofac (LON:PFC) was sitting just below the opening level, while another oil and gas engineering firm Amec (LON:AMEC) outperformed the sector, rising 1.15%.
JKX Oil & Gas (LON:JKX) outperformed fellow midcaps, surging 4%.
Melrose Resources (LON:MRS) moved in the opposite direction, dropping 3.7%. Heritage Oil (LON:HOIL) declined 3.3%, while Soco International (LON:SIA) and Dragon Oil (LON:DGO) lost 1.5% and 1% respectively.
Premier Oil (LON:PMO) and Salamander Energy (LON:SMDR) declined marginally.
Services companies Wood Group (LON:WG) and Wellstream Holdings (LON:WSM) shed just over 1%.
Chinese coal bed methane (CBM) gas producer Green Dragon Gas (LON:GDG) and US focused Caza Oil & Gas (LON:CAZA) were among the leaders in the sector on AIM with gains of 12%.
Mongolia operating Petro Matad (LON:MATD) also did well, rising 5.5%.
Gold drops to $1,390
Gold and other precious metals retreated today as the US dollar strengthened, curbing the yellow metal’s appeal as an alternative investment.
Gold last traded at US$1,390/oz. Silver and platinum declined to US$26.75/oz and US$1,756/oz respectively.
Mining stocks were mixed today. In the FTSE 100, platinum producer Lonmin (LON:LMI) posted a small gain, as did Randgold Resources (LON:RRS), while fellow gold miner African Barrick Gold (LON:ABG) declined 1.6%.
Silver miner Fresnillo (LON:FRES) was down 1%.
Midcaps were in the red. Aquarius Platinum (LON:AQP) and silver producer Hochschild Mining (LON:HOC) declined 1.3% and 2.4% respectively.
Gold miner Petropavlovsk (LON:POG) was sitting just below the opening level.
AIM-listed gold producer with operations in Africa Goldplat (LON:GDP) was among the top performing small caps, rallying 10.5%. Diversified mining investment company Electrum Resources (LON:ECR), which holds an exclusive option over the Copper Flat project, followed, rising 10%.
Norseman Gold (LON:NGL), which operates Australia’s longest continuously running gold mining operation, and South Africa and Mozambique focused gold miner Pan African Resources (LON:PAF) added 8%.
Latin America focused gold producer and explorer Orosur Mining (LON:OMI) climbed 7.5%.
Miners mixed
Base metals were headed in different directions. While copper held steady at US$3.92/lb, nickel rose to US$10.96/lb and zinc declined to US$1.112/lb.
Vedanta Resources (LON:VED) led the sector with a 1.5% gain. Eurasian Natural Resources (LON:ENRC) and Kazakhmys (LON:KAZ) rose marginally.
Anglo American (LON:AAL) and Xstrata (LON:XTA) declined 1.9% and 1.2% respectively. BHP Billiton (LON:BLT) was down 1%.
Antofagasta (LON:ANTO) and Rio Tinto (LON:RIO) posted small losses.
London’s only listed pure iron ore producer and FTSE 250 constituent Ferrexpo (LON:FXPO) stood just above the opening level.
Coking coal producer and explorer Caledon Resources (LON:CDN) led the juniors, rallying 16% after agreeing to a £252 million bid from a Chinese company. Australian-based minerals company focuse don uranium Forte Energy (LON:FTE) followed, climbing 6%.
Banks, insurance, private equity
Part-nationalised banks Royal Bank of Scotland (LON:RBS) and Lloyds (LON:LLOY) declined 2.4% and 1.3% respectively. Barclays (LON:BARC) also lost 1.3%. Standard Chartered (LON:STAN) declined marginally.
HSBC (LON:HSBA) went against the tide, rising 1%.
Insurance companies weren’t very active today. Admiral Group (LON:ADM), Legal & General (LON:LGEN), Old Mutual (LON:OML) and Standard Life (LON:SL) declined marginally.
Aviva (LON:AV) and RSA Insurance Group (LON:RSA) posted small gains and Prudential (LON:PRU) held steady.
Private equity group 3i (LON:III) added less than 1%.
Small Cap Movers
Other notable movers among the small caps included human tissue provider Asterand (LON:ATD) and coloured gemstone company focused on Zambian emeralds Gemfields (LON:GEM), which rallied 12%.
Small Cap News
DiamondCorp (LON:DCP, JSE:DMC) has recovered 2 macro-diamonds and 49 micro-diamonds from a drilling programme at the J-05 kimberlite in Botswana.
Xcite Energy (LON:XEL, TSX-V:XEL) has reached target depth for the horizontal section of the 9/3b-6 well on the Bentley field. The company told investors that it has successfully tracked the top of the reservoir, and the well provides over 1,800 feet of gross reservoir.
Green Dragon Gas Ltd (LON:GDG) has decided to proceed with a main board listing on the Hong Kong Exchange in 2011 and has requested a quote for the supply of a drilling fleet of 25 rigs, complementing its existing drilling fleet of 7 rigs.
Xcite Energy (LON:XEL, TSX-V:XEL) shares shot up this morning, when it announced it had reached target depth in the horizontal section of the 9/3b-6 well on the Bentley field. It gave back gains later in the session.
Solomon Gold (LON:SOLG) revealed that Newmont Mining (NYSE:NEM) has identified new targets at the Guadalcanal joint venture project. Newmont is currently exploring the Mbetilonga and Chikora prospects.
Caledon Resources (LON:CDN, ASX:CCD) has agreed to be acquired by Guangdong Rising Assets Management at a huge premium to its current market value.
Victoria Oil & Gas (LON:VOG) confirmed today it is on target to deliver first gas from its Logbaba project in Cameroon in the first quarter of 2011. The company said it is waiting to be issued with its exploitation authorisation and domestic transport authorisation licences, though it is confident of receiving them.
Nyota Minerals (LON:NYO, ASX:NYO) has successfully completed a £21.6 million fundraising it announced in September, enabling it to fast track the flagship Tulu Kapi project in Ethiopia.
Madagascar Oil has announced its intention to list on the AIM market on the London Stock Exchange, looking to eventually be taken over by an “entity interested in heavy oil plays”.
Edison Investment Research has updated its forecasts for Anglesey Mining’s (LON:AYM) 41% owned Labrador Iron Mines (TSX:LIM) following the successful resolution of a dispute with the Quebec Innu First Nation.
Baobab Resources (LON:BAO) managing director Ben James said that drilling results are beginning to reveal the greater potential of the Tete project’s South Zone.
Helius Energy (LON:HEGY) is a credible play on biomass energy development and its shares have been overlooked by investors, says Numis Securities analyst Will Wallis.
Petro Matad (LON:MATD)confirmed it will drill at least one more well in 2010, after it secured a specially ‘winterised’ drilling rig in eastern Mongolia. The company hopes to spud the Davsan Tolgoi 4 well as soon as possible.
Gulf Keystone Petroleum (LON:GKP) told investors that the Bijeel-1 tests in the Kurdistan region in Iraq have been completed and the results have confirmed the Akri Bijeel oil discovery. Fox-Davies oil analyst Lionel Therond identified a number of short-term price catalysts for Gulf Keystone. The analyst believes that a potential resolution to the political standoff in Iraq, with the formation of a federal Iraqi government, could provide a near-term share price catalyst.