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Additional	Information
Market:	ASX
Sector:	Media
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News:	Latest news
Web Site:	Proactiveinvestors Australia
Other Articles:	04-01-201030-12-200924-12-2009

FTSE 100 sinks as commodities tumble, Severn Trent and United Utilities rise on Ofwat decision

Overview: the FTSE 100 continued its freefall after trading resumed in mid afternoon following a break due to what was explained as technical issues. The UK blue chip index stood 170 points, or more than 3% below the opening level at the end of the day with just two FTSE 100 constituents remaining above the opening level.

Utility company Severn Trent (LSE: SVT) rose 3.5%, while peer United Utilities (LSE: UU) posted a marginal gain after regulator Ofwat decided to reduce average water bills by just £3 to £340 before inflation until 2015 compared the £14 reduction put forward in July.

Financial stocks sank to the bottom of the market today as Royal Bank of Scotland (LSE: RSB), insurer Legal & General (LSE: LGEN) and banking group Barclays (LSE: BARC) emerged as the three biggest fallers among the blue chips with losses of over 7%.

Another bank Standard Chartered (LSE: STAN) joined in with a 6% loss.

Miners and oil & gas companies also were in decline as oil and metal prices declined. Base metals focused miners Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) led the retreat with losses of 6%.

Plumbing and heating equipment manufacturer Wolseley (LSE: WOS) also was in selling mode, shedding 5%.
The US stock market was closed due to Thanksgiving Day.

Commodities

Oil prices eased later in the day after rising in the morning as January Brent Crude fell to US$77.65/barrel, while US light, sweet crude moved down to US$76.53/barrel.

Major oil and gas stocks were in decline today. BG Group (LSE: BG) sank to the bottom of the pile with a 2.6% loss. Petrofac (LSE: PFC) followed, retreating 2.2%. Cairn Energy (LSE: CNE) and Tullow Oil (LSE: TLW) shed more than 1.5%, as did supermajor BP (LSE: BP) and Shell (LSE: RDSB).

Midcaps also were in decline with Dana Petroleum (LAE: DNX) and Heritage Oil (LSE: HOIL) shedding nearly 2%, while Dragon Oil (LSE: DGO) was down 1.5%.

North America focused oil & gas junior Pantheon Resources (AIM: PANR) led the small caps, rallying 13.5%, while Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) added 6%.

Kazakhstan operating Max Petroleum (LSE: MXP) moved in the opposite direction, slipping 8%. Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) and energy investor Xtract Energy PLC (AIM: XTR) both slid 5%. Europe focused oil and gas developer Ascent Resources (AIM: AST), Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) and Irish oil and gas exploration company Petroceltic International (AIM: PCI) all lost 3%.

Gold and silver decline to weaken miners

Precious metals slid today with gold moving down to US$1,183/oz after nearly eclipsing US$1,200/oz, while silver and platinum declined to US$18.47/oz and US$1,449/oz respectively.

Mining stocks retreated with Fresnillo (LSE: FRES) leading the way with a 4.7% decline. Platinum miner Lonmin (LSE: LMI) and gold producer Randgold Resources (LSE: RRS) followed with losses of 3.7% and 2.2% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) lost 3.6%.

Midcaps fell into the same pattern as gold miner Petropavlovsk (LSE: POG) and silver producer Hochschild Mining (LSE: HOC) lost about 2.5%, while Aquarius Platinum (LSE: AQP) declined 2.7%.

Brazil focused gold miner Horizonte Minerals (AIM: HZM) and South American based explorer Mariana Resources (AIM: MARL) led the small caps with gains of over 5%.

Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD), Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) went in the opposite direction, retreating 9%, 5% and 3.5% respectively.

Copper and nickel fall

Base metals also fell with copper and nickel declining to US$3.12/lb and US$7.54/lb respectively, while zinc held on to US$1.01/lb.

Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA) emerged as the biggest fallers among the base metals focused miners with each shedding 6%. Antofagasta (LSE: ANTO), Vedanta Resources (LSE: VED) and Rio Tinto (LSE: RIO) declined 4.5%. Anglo American (LSE: AAL) and Eurasian Natural Resources (LSE: ENRC) lost 4%.
BHP Billiton (LSE: BLT) was down 3%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, shedding 3%.

Iron ore focused investor Red Rock Resources (AIM: RRR) was among the top performers in the sector with a 5% climb. South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR) also rose, adding 3%.

Laterite nickel specialist European Nickel (AIM: ENK) was one of the biggest fallers with a 7% loss. Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and zinc mining and recycling specialist ZincOX (AIM: ZOX) slipped 4%, while Indonesia operating coal miner Churchill Mining (AIM: CHL) pulled back 3%.

Banks, insurance, private equity

Royal Bank of Scotland (LSE: RBS) emerged as the heaviest faller in the banking sector with a loss of nearly 8%. Barclays (LSE: BARC) tumbled 6.5%, while Standard Chartered (LSE: STAN) and HSBC (LSE: HSBA) lost more than 5%. Lloyds (LSE: LLOY) pulled back 4%.

Insurers also were in selling mode. Legal & General (LSE: LGEN) was at the bottom of the pile with a 7.5% loss. Old Mutual (LSE: OML) dipped 5.5%, while Aviva (LSE: AV) lost nearly 5% and Prudential (LSE: PRU) and Standard Life (LSE: SL) tumbled 4%. RSA Insurance Group (LSE: RSA) was down 3%.

Car insurer Admiral Group (LSE: ADM) did relatively well, keeping its gains down to 1.2%.

Private equity group 3i (LSE: III) declined 3%.

Small Cap Movers

Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS), which surged 10.5%, African focussed soft commodity specialist, Agriterra Limited (AIM: AGTA) and UK based electrical components producer and supplier Cinpart (AIM: CINP), which tumbled 4.5% and 8% respectively, and drug discovery and development group Immupharma (AIM: IMM) with an 8.5% loss.

Large and Mid Cap News

Heritage Oil Plc (LSE: HOIL) announced it has started drilling the Miran West-2 appraisal well in Kurdistan. The well is the first to be drilled in a multi-well exploration and appraisal drilling programme on the Miran Block.

European electrical retailer DSG International (LSE: DSGI) revealed narrowing losses in its half yearly report for the 24 weeks to the 17 October. Underlying group sales fell 1% to £3.33 billion, and pretax loss narrowed to £23.1 million compared to a £55.6 million loss in the same period last year. Chief executive John Browett said the ‘turnaround is on track’ and the company is well positioned ahead of the peak Christmas trading season.

In their final results for the year ended 26 September, Mitchells & Butlers (LSE: MAB) said it has produced a robust operational performance. Over the full year, the group achieved like-for-like sales growth of 1.6% and total revenues increased 2.6%. Food and drink sales achieved like-for-like growth of 3.1% and 1.8% respectively. Mitchells and Butler shares climbed almost 2% following the results.

Hochschild Mining PLC (LSE: HOC) said it deputy chairman and executive director Roberto Danino was appointed to the Lake Shore Gold Corp (TSX: LSG) board as a director with immediate effect.

Small Cap News

West China Cement (AIM: WCC) expects its Ankang plant to operate with a higher profit margin after equipping it with a limestone conveyor belt, the completion of which was announced today.

Producer of agricultural commodities Landkom International (AIM: LKI) has raised £9.75 million through a placing, securing enough cash to fund spring planting and carry it through to harvest in 2010, while full year losses are expected to be in line after the group stabilised its overhead spending at about US$450,000 per month.

Specialist pensions consultancy Mattioli Woods (AIM: MTW) said the business performed even though investment markets were still “far from normal,” and the full year results were expected to be in line with board’s expectations.

Falkland Oil & Gas Limited (AIM: FOGL) has announced a placing of 43.5 million shares to raise £50 million to fund its share of the planned drilling programme in the East Falklands Basin and help the company meet its working capital requirements through to the end of 2011.

Horizonte Minerals PLC (AIM: HZM) said the latest metallurgical results from the laterite nickel discovery at its Lontra project in northern Brazil indicate suitability for a low cost heap leach process and significant nickel and cobalt recoveries with low acid consumption.  Nickel recovery averaged 92 percent and cobalt 82 percent in the transition and silicate zones of the deposit.

Exeter Resource Corp  (AMEX: XRA, TSX: XRC) said it has closed the C$50 million equity financing announced earlier this month under which the company sold 8.55 million shares at C$5.85 to a syndicate of underwriters pursuant to a short form prospectus in Canada and a concurrent private placement to US institutional investors.

Red Rock Resources (AIM: RRR) will mobilize the first circulation rig to the Migori greenstone belt in Kenya on 7 December to advance the current drilling programme aimed at increasing and upgrading the current indicated gold resource of the Migori project.

Africa focused gold miner Pan African Resources (AIM: PAF; JSE: PAN) said it was in discussions over a transaction that could significantly impact the company’s stock price, also announcing that it would make the move to the main board of the Johannesburg Stock Exchange on 1 December.

UK based stem cell therapy company ReNeuron (AIM: RENE) announced it has secured a £5 million equity funding facility with its joint broker Matrix Corporate Capital, securing financing into 2011. ReNeuron retains control over the timing and amount of any draw-down.

At its AGM, Seeing Machines (AIM: SEE) highlighted its previously reported 19% increase in full-year revenues and said it is progressing in its transition to a much more commercially focused company. The computer vision systems developer held AGM earlier today in Canberra, Australia.

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