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Market:	ASX
Sector:	Media
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Web Site:	Proactive Investors Australia
Other Articles:	11-08-201006-08-201005-08-2010

FTSE 100 stays flat as miners retreat, US stocks rise on jobless claims update

Overview: the FTSE 100 inched just 0.1% lower in late afternoon after fluctuating within a narrow range around the opening level for most of the day. The slight decline was despite a positive start in the US, where the Dow Jones Industrial Average and the S&P 500 made small gains, while the technology heavy Nasdaq composite rose 0.4%. The markets were buoyed by today’s employment update, which said that jobless claims in the US fell to the lowest level in 14 months, giving another sign of recovery in the labour market.

Financial stocks were bullish today with part-nationalised banks Lloyds (LSE: LLOY) and RBS (LSE: RBS) and insurer Legal & General (LSE: LGEN) making it to the top three with gains of about 4%. Other notable risers included airline British Airways (LSE: BAY) with a 2% gain as well as software developer Sage Group (LSE: SGE) and hospitality companies InterContinental Hotels (LSE: IHG) and Whitbread (LSE: WTB), which all gains about 1.5%.

The mining sector dragged the market down with Xstrata (LSE: XTA), Rio Tinto (LSE: RIO), Anglo American (LSE: AAL), Fresnillo (LSE: FRES) and Randgold Resources (LSE: RRS) emerging as the biggest fallers among the blue chips with losses of 2-3%. Tullow Oil (LSE: TLW), software developer Autonomy Corporation (LSE: AU) and broadcaster BSkyB (LSE: BSY) also fell, shedding 3%, 1.8% and 1.5% respectively.

Commodities

Oil prices inched slightly lower later in the afternoon as January Brent Crude declined to US$78.24/barrel, while US light, sweet crude for January delivery slid to US$76.46/barrel.

Oil and gas stocks didn’t show much movement today. Cairn Energy (LSE: CNE) was the top performer among the blue chip energy companies, rising 1.2%, while Tullow Oil (LSE: TLW) headed in the opposite direction, shedding 1.5%. Shell (LSE: RDSB) posted a small gain, while fellow supermajor BP (LSE: BP) declined marginally, as did Petrofac (LSE: PFC). BG Group (LSE: BG) tacked on less than 1%.

Midcaps also were mixed. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) both advanced 1.3%, while Heritage Oil (LSE: HOIL) retreated 1.2%.

North Sea explorers Xcite Energy (AIM: XEL) and Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) were among the top performers in the sector, rallying 23% and 17% respectively.

Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and energy investor Xtract Energy PLC (AIM: XTR) followed, tacking on 7% and 5% respectively.

Africa focused energy company Dominion Petroleum (AIM: DPL) and Kazakhstan operating Max Petroleum (LSE: MXP) went in the opposite direction, sliding 6% and 4% respectively.

Gold, silver and platinum slide

Precious metals inched lower with gold sliding to US$1,207/oz after hitting new highs at $1,225/oz, while silver and platinum retreated to US$18.85/oz and US$1,490/oz respectively.

Most major mining stocks declined as metal prices slid. In the FTSE 100, gold miner Randgold Resources (LSE: RRS) and silver producer Fresnillo (LSE: FRES) slid 1.3% and 1.8% respectively, while platinum miner Lonmin (LSE: LMI) declined 2.3%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) went against the tide, posting a small gain.

Midcaps also were in decline as Aquarius Platinum (LSE: AQP) retreated 3%, silver producer Hochschild Mining (LSE: HOC) pulled back 1.2% and gold miner Petropavlovsk (LSE: POG) declined marginally.

Africa operating gold miner GMA Resources (AIM: GMA) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) were the top performers in the sector with gains of 11% and 10%. Iran focused gold explorer Persian Gold (AIM: PNG) also advanced 10%.

Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) followed, climbing 7%, while Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) both added 6.7%.

South Africa focused emerging platinum producer Platmin (AIM: PPN) also rose, gaining 4%.

Australian gold and copper prospector Solomon Gold (AIM: SOLG) went in the opposite direction, slipping 10%. Tajikistan operating gold miner Kryso Resources (AIM: KYS) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) moved down 6% and 5% respectively.

Copper and nickel fall to weaken miners

Base metals headed south today with copper and nickel retreated to US$3.20/lb and US$7.26/lb respectively. Zinc held steady at US$1.08/lb.

Base metals focused stocks also declined today. Xstrata (LSE: XTA) was at the bottom of the pile with a 3.4% decline. Anglo American (LSE: AAL) and Rio Tinto (LSE: RIO) followed with losses of 2%, while Antofagasta (LSE: ANTO) was down 1.5%. BHP Billiton (LSE: BLT) and Kazakhmys (LSE: KAZ) declined marginally. Vedanta (LSE: VED) and Eurasian Natural Resources (LSE: ENRC) went against the tide, posting small gains.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was flat.

Copper and nickel explorer Regency Mines (AIM: RGM) and iron ore focused investor Red Rock Resources (AIM: RRR) were the top performers in the sector, tacking on 8% and 6% respectively.

South American focused junior miner Herencia Resources (AIM: HER) tumbled 11%.

Banks, insurance, private equity

Financial stocks were on the rise today. Part-nationalised bank Lloyds (LSE: LLOY) was in the lead with a 4.5% gain, while Barclays (LSE: BARC) and Royal Bank of Scotland (LSE: RBS) added 3%. Standard Chartered (LSE: STAN) rose 1.2%, while HSBC (LSE: HSBA) rose marginally.

Legal & General (LSE: LGEN) was in the lead with a 4% climb. Prudential (LSE: PRU) rose 2%, while Aviva (LSE: AV) and Standard Life (LSE: SL) advanced 1%. Admiral Group (LSE: ADM) and RSA Insurance Group (LSE: RSA) rose marginally, as did Old Mutual (LSE: OML).

Private equity group 3i (LSE: III) did well, adding 2.3%.

Small Cap Movers

Other notable movers among the small caps included UK based electrical components producer and supplier Cinpart (AIM: CINP), which climbed 11%. Novel eco-technology company for human, animal and environmental health TyraTech (AIM: TYR) and Direct marketing software developer smartFOCUS (AIM: STF) declined 8.5% and 4% respectively. Software developer Rubicon Software (AIM: RUBI) lost 7.5%.

Large and Mid Cap News

Xstrata (LSE: XTA) has approved plans to develop its Ernest Henry copper mining operations in north-west Queensland, Australia. Through a total investment of US$542 million, the FTSE100 miner will transform current open pit mining operations into a major underground mine, extending mine-life until at least 2024.

International drug maker AstraZeneca (LSE: AZN) and emerging US biopharmaceutical company Targacept Inc (NASDAQ: TRGT) announced a collaboration and licence agreement for TC-5214, a late-stage product for major depressive disorder (MDD). The initial deal sees AstraZeneca pay Targacept US$200 million, with total future payments reaching up to US$1.04 billion subject to development and sales milestones.

In its Q3 trading statement for the period ended 31 October, B&Q parent company Kingfisher (LSE: KGF) revealed a strong set of results, with a 5.6% increase in total reported sales and a 284% increase in reported retail profits. The FTSE100 retailer also noted that 80% of its third quarter profit was earned outside the UK market.

UK public transport operator Go-Ahead Group PLC (LSE: GOG) announced it will sell most of its aviation ground handling and cargo operations for a combined £15 million, which will be offset by the cost of residual liabilities.  Go-Ahead said the broadly cash neutral deal enables it to focus on core businesses. The aviation services division is expected to breakeven this year, compared to last year’s £4.2m loss.

The rift between FTSE 250 pub company Mitchells and Butlers (LSE: MAB) and its largest shareholder the Piedmont Investment Group appears to be growing. The dispute with the investment company, backed by Bahamian Billionaire Joe Lewis, took a turn for the worse this week.

Small Cap News

Landore Resources (AIM: LND) reported a significant gold discovery at its Junior Lake property in Ontario, where drilling intersected widespread gold mineralisation over 200 metres of strike extent tested and returned results including an intersection of 3m (metres) grading at 9.14 g/t (grammes per tonne) gold, including 0.6m grading at 35.63 g/t gold.

Discovery Metals (ASX/BSE: DML) has wrapped up a Share Purchase Plan to raise $2.7 million, with approximately 20% of the Company’s shareholders accepting the offer to participate.

Herencia Resources PLC (AIM: HER) said it is re-establishing its Paguanta project site in Chile for a new drilling program which it expects to complete in May 2010. The AIM listed mineral exploration and development company hopes to reach the feasibility study phase by H2 2010.

Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) has appointed former exploration director for North Africa and Near East at Suncor Energy Inc (TSX, NYSE: SU), Christopher Brown, as its exploration manager.

Fusion IP PLC (AIM: FIP), the university commercialisation company which turns university research into business, said Dr Alison Fielding is joining the board as non-executive director with immediate effect.

Panmure Gordon retained its bullish stance on ImmuPharma (AIM: IMM) despite the recent 35% decline in the share price following the conclusion of Phase IIb trials of the company’s leading product candidate Lupuzor.

Iron ore focused investor Red Rock Resources (AIM: RRR) has upped its stake in Kansai Mining Corp, which owns the rights to the Migori gold project in Kenya, to 35.2% to become its largest shareholder just days after announcing intention to enhance exposure to the Migori gold belt.

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