Overview: the FTSE 100 ended the day with gains, marking a reverse from yesterday’s retreat when the blue chip index lost 40 points. The market was boosted by the mining and energy sectors which made gains responding to increases in oil and metals prices as oil benchmarks, gold, silver, copper and nickel all inched higher. Wall Street also opened higher with the Dow Jones industrial average tacking on about 15 points in early trade, contributing to the positive sentiment and helping the Footsie to more gains.
Mining stocks expectedly flooded the leadboard, yet it was tour operator Carnival Corporation (LSE: CCL) that led the pack with a 5.3% improvement. Sector peer TUI Travel (LSE: TT) rose 3.6% in sympathy.
London listed Kazakh miner Eurasian Natural Resources (LSE: ENRC) rallied 5.2% to lead the sector, while Fresnillo (LSE: FRES), Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) followed, climbing 4.2%, 3.3% and 3.2% respectively.
The fallers list was topped by defensive stocks, primarily utility companies, and retailers. United Utilities (LSE: UU) and sector peer Severn Trent (LSE: SVT) sank to the bottom of the FTSE 100, dipping 2.6% and 2.4%. Packaging group Rexam (LSE: REX) joined in with a 1.2% loss following the announcement of the shutdown of its can plant in Dunkirk. Commercial property company British Land (LSE: BLND) was another notable faller with a 2.3% decline.
Commodities
Oil prices showed some improvement today after falling overnight on disappointing new from China, where oil consumption decreased 5.4% month on month in August. Brent Crude rose 2.3% to US$69.2/barrel, while benchmark crude for October delivery improved to US$71.3/barrel. West Texas Intermediate rose to US$71.7/barrel.
As usual, supermajors BP (LSE: BP) and Shell (LSE: RDSB), didn’t show much movement about 1%. BG Group (LSE: BG) added about 2% early, but then had its gains trimmed to less than 1%. Tullow Oil (LSE: TLW) also rose, adding 1.3%. Other FTSE 100 constituents Petrofac (LSE: PFC) and Cairn Energy (LSE: CNE) took the same path, climbing 1.1% and 1.5% respectively.
Mid caps were mixed. Heritage Oil (LSE: HOIL) and Dragon Oil (LSE: DGO) slid 1.3% and 1.7% respectively, while fellow FTSE 250 constituent Dana Petroleum (LSE: DNX) was the top performer among major oil and gas stocks with a 2.3% climb.
Most juniors were in selling mode this morning. Eastern European focused junior Aurelian Oil & Gas (AIM: AUL) was the leading faller, plummeting 27% after reporting disappointing results from its Voitinel-1 well in Romania, failing to hit oil, but finding gas shows above the targeted area.
Latin American focused Gold Oil (LSE: GOO) dipped 9%, while US focused Empyrean Energy (AIM: EME) shed over 5%. Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) moved down 3%, as did Iraq operating Irish oil company Petrel Resources (AIM: PET), European focused oil and gas developer Ascent Resources (AIM: AST) and US focused oil and gas junior Caza Oil & Gas (AIM: CAZA).
Mining stocks strong on higher prices
Precious metals prices improved today following yesterday’s declines. Gold surged back to US$1,014/oz, while Silver rose to US$17.14/oz and Platinum reached US$1,329/oz.
With only rare exceptions, mining stocks were in good shape following a recovery in metals prices after yesterday’s declines.
Gold producer Peter Hambro Mining (LSE: POG) outperformed other major mining stocks with a 5% climb, but fellow mid caps silver miner Hochschild (LSE: HOC) and Aquarius Platinum (LSE: AQP) slipped into the red with the latter declining 2%.
FTSE 100 miners Randgold Resources (LSE: RRS) and Lonmin (LSE: LMI) added more than 2%, while fellow blue chip Fresnillo (LSE: FRES) climbed 3.4%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved up 1.3%. Yamana Gold (LSE: YAU) added 3.3%.
London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a 44% rally after selling its Chinese Zheng Guang project. Africa operating gold miner GMA Resources (AIM: GMA) followed with a 19% surge.
Another African focused junior Cluff Gold (AIM: CLF) also did well, tacking on 6.7%. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) rose 4.2%.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) added 7% in early trade, but had its gains wiped out later in the day.
Turkey focused gold miner Ariana Resources (AIM: AAU) headed in a different direction, slipping 12.5%. Nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR) lost 4% and Fijian operating Vatukoula Gold Mines (AIM: VGM) shed 3%.
Nickel and Copper rise to boost miners
Base metals also rose. Copper reached US$2.82/pound, Nickel was at US$7.94/pound and Zinc climbed to US$0.86/pound.
Major base metals miners all rose this morning. Rio Tinto (LSE: RIO) was in the lead after announcing the sale of Alcan Composites to Schweiter for US$349 million. The company moved up 3.4%. Vedanta Resources (LSE: VED) also added more than 3%. Vedanta Resources (LSE: VED), Kazkahmys (LSE: KAZ), Antofagasta (LSE: ANTO) and Anglo American (LSE: AAL) rose over 2%. The world’s largest miner BHP Billiton (LSE: BLT) climbed 1.6%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) tacked on less than 1%.
Iron ore focused investor Red Rock Resources (AIM: RRR) emerged as the leading faller among the juniors in late afternoon with a 9% dip.
Specialty minerals exploration and development company Thor Mining (AIM: THR) and nickel and iron ore exploration junior Landore Resources (AIM: LND) also switched to selling mode, shedding over 5%. Cement operator Prosperity Mineral Holdings (AIM: PMHL) also was in decline, losing almost 5%.
Tunisia operating metal miner Maghreb Minerals (AIM: MMS) and Mozambique operating tantalum producer Noventa (AIM: NVTA) followed, retreating 3%.
South Africa operating chrome miner Chromex Mining (AIM: CHX) and Indonesia operating coal miner Churchill Mining (AIM: CHL) outperformed their peers, gaining 7.7% and 5.7% respectively.
Banks, insurance, private equity
Financial stocks were mixed today. Banking groups did now show much movement in the morning, but managed to stay on positive ground except for HSBC (LSE: HSBA), which posted marginal declines. Lloyds (LSE: LLOY) added 1.3%, while fellow bailed out bank Royal Bank of Scotland (LSE: RBS) rose marginally, as did Barclays (LSE: BARC). Standard Charetered (LSE: STAN) improved 1%.
Insurers did slightly better. Old Mutual (LSE: OML) and Aviva (LSE: AV) led the pack, climbing 3% and 2% respectively. Legal & General (LSE: LGEN) followed with a 1.7% gain.
Friends Provident (LSE: FP) rose marginally, as did Standard Life (LSE: SL) and RSA Insurance Group (LSE: RSA).
Private equity group 3i (LSE: III) lost 1%.
Large and Mid Cap News
Packaging group and FTSE 100 constituent Rexam (LSE: REX) said it had entered negotiations with employee representatives to shut down its beverage can making plant in Dunkirk, France as part of its capacity reduction programme announced together with the group’s half year results.
Small Cap News
Sinclair Pharma PLC (LSE: SPH) said it is currently in discussions about a potential significant product acquisition. It would expect to fund this acquisition substantially through an equity fundraising and it would be subject to shareholder approval.
Shares in CVS Group (LSE: CVSG) were in demand after the veterinary services company released its full year results, reporting substantial increases in revenues and operating profit.
Small cap Australian fund manager Acorn Resources, has acquired 6.1 million shares in Finders Resources (ASX & AIM: FND) at an average price of A$0.33 per share. These were acquired between August and September 2009.
African focused nickel and gold exploration and development junior, Dwyka Resources (AIM & ASX: DWY) is changing its name to Nyota Minerals (AIM & ASX: NYO) effective tomorrow.
Jubilee Platinum PLC (AIM: JLP) announced the placing of 6 million shares at 32.5 pence each to finance certain of Braemore Resources PLC’s (AIM: BRR) obligations prior to the completion of the merger of Jubilee and Braemore.
Braemore Resources PLC (AIM: BRR), which is being taken over by Jubilee Platinum PLC (AIM: JLP), said it expects its loss per share for the year ending June 30 2009 to widen to 0.94 pence from 0.21p a year earlier, mainly due to the the shutdown and commissioning of the expanded demonstration smelter and sharp falls in metal prices during the first half.
Mobile email and data synchronisation provider Synchronica (AIM: SYNC) released its interim results today, reporting a sevenfold jump in revenues, driven by the sales of its flagship products Mobile Backup and Mobile Gateway.
Gemstone producer TanzaniteOne (AIM: TNZ) said today it had formed a joint venture (JV) called TanzaniteOne CuttingEdge to focus on precision cutting and visual optimization of predominantly lighter coloured tanzanites.
Eastern European focused Aurelian Oil & Gas (AIM: AUL) announced that Voitinel-1 well has reached total depth at 2,076m. The primary Badenian sand objective was non-hydrocarbon bearing, neither were the underlying Albian sands. Shares in Aurelian Oil & Gas plummeted on the open this morning following the announcement, falling almost 30% in early trading.
Irish-based Iran operating miner Persian Gold (AIM: PNG), which was among the companies to report on its interim results today, noted the lack of progress in securing a discovery certificate for its Chah-e-Zard discovery from the Iranian authorities, saying it was looking into other opportunities in the region.
Shares in Minerva PLC (LSE: MNR) soared in morning trade after the property investment, development and management group announced it has refinanced, extended or restructured loan facilities in excess of £750 million.
Greenland Minerals & Energy (ASX: GGG) has appointed London-based investment bank Evolution Securities as its broker and corporate adviser as the company prepares for its next stage of growth.
Leyshon Resources (AIM: LRL, ASX:LRL) has announced the conditional agreement of its long awaited divestment of it’s Chinese Zheng Guang Project. Trading in Leyshon resumed today following the update, this morning’s trading in London saw Leyshon Resources surge over 60% immediately after the news with its shares reaching 9 pence.
Technology company Sarantel Group (AIM: SLG) said it had received first production orders for its Iridium data antenna for use in the Solara Field Tracker 2100, a real-time GPS tracking and messaging device.
Zinc mining and recycling specialist ZincOx Resources (AIM: ZOX) reported interim results today, saying construction of its Jabali mine in Yemen was progressing in line with expectations and reiterating its intention to find a cost effective way of developing its first recycling project.
Gulfsands Petroleum PLC (AIM: GPX) swung to a profit in the first half, the first in five years, on revenue that rose 47 percent year-on-year, saying production from Block 26 in Syria has already reached the level it was targeting for the end of 2009.
Sirius Exploration PLC (AIM: SXX; OTCBB: SRUXY) said it has has entered into a lock-up agreement with the directors and management of AusPotash Corp pursuant to which Sirius will buy the Australian group for C$0.40 per share.
Irish Oil and Gas exploration company Petroceltic International (AIM: PCI) has announced a new gas discovery in Algeria. The AT-1 exploration well on the Isarene permit was successfully tested at a depth of 1,915m, and it has been completed for possible future use as a production well. Testing reveals that potential hydrocarbons are a ‘magnitude’ larger than earlier discoveries.