Overview: The FTSE 100 did well today, climbing 0.8% despite negative jobless data that came out in the US. Initial jobless claims were shown to have increased to 472,000 last week, while a decline was expected. Continuing claims increased by 88,000 to 4.57 million. In other news, the US consumer price index declined by 0.2% as gasoline prices slumped.
BP emerged atop the leaderboard with a gain of nearly 8%. Part-nationalised banks Lloyds (LON:LLOY) and RBS (LON:RBS) followed, climbing 4% and 3.5% respectively. Another bank Standard Chartered (LON:STAN) rose 3%, as did hedge fund manager Man Group (LON:EMG). Other notable risers included consumer products company Reckitt Benckiser (LON:RB) with a 2% gain and plumbing and heating equipment manufacturer Wolseley (LON:WOS) and satellite communications company Inmarsat (LON:ISAT), which tacked on 1.7% and 1.5% respectively.
Silver miner Fresnillo (LON:FRES) was at the bottom of the pile with a 3.2% loss. Base metals focused Eurasian Natural Resources (LON:ENRC) followed with a 2.3% loss. Tour operator TUI Travel (LON:TT) and commercial property company Land Securities Group (LON:LAND) each lost 1.6%. Energy company Centrica (LON:CNA) and another property stock British Land (LON:BLND) moved down 1.5%.
US stocks were off to a positive start today. The Dow Jones Industrial Average rose 0.15%, while the broader S&P 500 index advanced 0.2% and the technology heavy NASDAQ composite climbed 0.45%.
Despite today’s gains in global stock markets, crude oil prices declined under pressure from this week’s weak US inventories reports. On Tuesday, the American Petroleum Institute (API) said US stockpiles added 579,000 barrels last week, while a decline was expected. Gasoline inventories increased by 1.34 million barrels, while distillates, which include heating oil and diesel, were up by 2.14 million barrels. A more closely watched report from Energy Information Administration (EIA) that came out yesterday, reported an increase to 1.7 million barrels.
Traders had to digest disappointing US housing data yesterday, which pushed down US stocks and commodities. The update from the Commerce Department showed a 10% decline in housing starts to an annualised 593,000 in May and building permits fell 5.9% to an annualised 574,000.
August Brent Crude retreated to US$78.56/barrel, while US light, sweet crude for July dropped to US$77.37/barrel on the New York Mercantile Exchange (NYMEX).
BP rallied 7.8% after agreeing to set up the fund and scrapping dividend. Fellow supermajpr Shell (LON:RDSB) posted a small gain, as did Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW). BG Group (LON:BG) went against the tide, sliding 1%.
Amec (LON:AMEC) was flat, while another engineering firm Petrofac (LON:PFC) retreated 1.5.
Midcaps were mixed. Dragon Oil (LON:DGO) and Premier Oil (LON:PMO) were at the bottom of the pile with losses of 2.6% and 1.9% respectively. Heritage Oil (LON:HOIL) and Salamander Energy (LON:SMDR) posted marginal losses. Melrose Resources (LON:MRS) and Soco International (LON:SIA) were flat, while Dana Petroleum (LON:DNX) and JKX Oil & Gas (LON:JKX) added less than 1%.
Wood Group (LON:WG) was unmoved. Fellow services company Wellstream Holdings (LON:WSM) climbed 1.2%.
Europa Oil & Gas (LON:EOG) and Aminex (LON:AEX) led the juniors, rallying 11% and 7% respectively.
Gold remains above $1,230 as safe haven demand stays strong
Gold remained above US$1,235/oz today as investors were still pouring money into the safer assets amid lingering worries over the European debt crisis. The safe haven demand remained strong despite today’s gains in global stock markets.
Gold climbed to US$1,236/oz, while silver and platinum improved to US$18.52/oz and US$1,571/oz respectively.
Platinum producer Lonmin (LON:LMI) and gold miner Randgold Resources (LON:RRS) led the mining sector with gains of 1.6% and 1% respectively. Silver miner Fresnillo (LON:FRES) slipped 3.3%.
Specialty chemicals firm Johnson Matthey (LON:JMAT) advanced 2.5%.
Midcaps did better. Aquarius Platinum (LON:AQP) and gold minmer Petropavlovsk (LON:POG) moved up 2.5% and 1.7%, while silver producer Hochschild Mining (LON:HOC) was flat.
Tajikistan operating gold miner Kryso Resources (LON:KYS) and London listed Australian gold producer Leyshon Resources (LON:LRL) advanced 7.5% and 6.5% respectively. Junior diamond producer Stellar Diamonds (LON:STEL) slipped 11.5%.
Base metals slide, but miners rise
Base metals were in decline today. Copper and nickel slid to US$2.95/lb and US$8.91/lb, while zinc dropped to US$0.78/lb.
Miners did well despite declines in metal prices. Eurasian Natural Resources (LON:ENRC) was an exception, dropping 1.6%. Vedanta Resources (LON:VED) and Rio Tinto (LON:RIO) advanced 2% and 1% respectively. BHP Billiton (LON:BLT) added nearly 1%. Anglo American (LON:AAL), Antofagasta (LON:ANTO), Kazakhmys (LON:KAZ) and Xstrata (LON:XTA) all posted marginal gains.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, adding less than 1%.
Junior companies didn’t show much movement. Iron ore focused investor Red Rock Resources (AIM: RRR) was in the lead with a 13% surge. Specialty minerals exploration and development company Thor Mining (AIM: THR) moved in the opposite direction, slipping 10%.
Banks, insurance, private equity
Banking stocks were in demand today. Part-nationalised Lloyds (LON:LLOY) and Royal Bank of Scotland (LON:RBS) were in the lead with gains of 4% and 3.4%. Standard Chartered (LON:STAN) and Barclays (LON:BARC) added 2.7% and 2.2% respectively. HSBC (LON:HSBA) posted a small gain.
Aviva (LON:AV) was the best performing insurance stock today with a 1% gain. Legal & general (LON:LGEN) and RSA Insurance Group (LON:RSA) were unmoved, while Old Mutual (LON:OML), Prudential (LON:PRU) and Standard Life (LON:SL) shed less than 1%. Admiral Group (LON:ADM) declined 1.3%.
Private equity group 3i (LON:III) stood just above the opening level.
Small Cap Movers
Other notable movers among the small caps included UK based electrical components producer and supplier Cinpart (AIM: CINP) with a 10% loss and offshore marine renewables development company SeaEnergy (LON:SEA), which rallied 7%.
Small Cap News
Range Resources (ASX, LON:RRS) has acquired a 13.56% interest in a second Texas oil field, in the Red River County that was home to a recent oil discovery.
Rawson Resources (ASX:RAW) has reported that Kea Petroleum Plc (LON:KEA) has reached a total depth of 4,100m at the Beluga-1 well, in exploration permit PEP51155, located within the Taranaki basin of New Zealand.
Mariana Resources (LON:MARL) told investors that reverse circulation (RC) drilling at the Perro Chico iron-oxide-copper-gold (IOCG) project in Northern Chile, encountered wide zones of strongly anomalous copper and gold. The company also noted that it is currently finalising the JV deal for the property with Cliffs Natural Resources Exploration (NYSE:CLF).
Shares in Alexandra (LON:AXD) fell by nearly 30% after the company stated that its application to convert its factory site in Scotland to a retail park had failed to secure approval from the local council.
Tantalum concentrate supplier with assets in Mozambique Noventa Ltd (LON:NVTA) has renegotiated and signed an amendment to its existing offtake agreement to reduce the annual quantities of tantalum concentrate it sells under this agreement, which will allow it to sell the remaining annual production to other parties.
Frontier Mining’s (LON:FML) chairman and CEO Erlan Sagadiev described 2009 as a critical and transformational year, during which “a new and stronger management team brought fresh financing and a re-energised vision to the company”. Since the year’s end, Frontier agreed a merger with Colville Intercorp - its JV venture partner at Benkala - to expand its interests in key development projects.
Equity Development Research issued a note on Synchronica PLC (LON: SYNC), saying the busy June/July contracting period could bring in “substantial orders” resulting from the detailed contract discussions that are currently taking place, also adding that the company had a “strong future” and maintaining its revenue forecasts.
Nyota Minerals Limited (LON:NYO, ASX:NYO) has reported further positive results from the ongoing exploration program at its flagship Tulu Kapi gold project in Ethiopia. The additional program, of reverse circulation (RC) and diamond drill (DD) holes, has discovered a new high-grade structure beneath the current 1.38Moz Inferred Resource, where it intersected 8.7m averaging 8.9 grams per tonne (g/t) gold.
Equity Development Research issued a note on Plant Impact (AIM: PIM), highlighting the substantial revenue growth achieved by the company, and its progress with regulatory approvals for flagship BugOil insecticide technology, offering a bullish outlook for its long-term growth, bolstered in part by the group's potential to tap into the US$100 billion arable crops market.
Central China Goldfields (LON:GGG) has decided to change its name to GGG Resources PLC to reflect its new emphasis “on its substantial and rapidly developing” Bullabulling joint venture in Western Australia. The 50% stake in Bullabulling, with its 431,600oz JORC in-situ gold resource, has become one of the company’s key projects as it’s transitioned away from its operations in the People’s Republic of China.
Gulfsands Petroleum (LON:GPX), the oil and gas company with assets in Iraq, Syria and the Gulf of Mexico, has said that ADX Energy (ASX:ADX), which operates two exploration projects in Tunisia and Italy has commenced the mobilisation of the Atwood "Southern Cross" semi submersible drilling rig to the Lambouka-1 well location on the Kerkouane Licence offshore Tunisia.
New Dawn Mining Corp (TSX:ND) has acquired an 89% controlling stake in Central African Gold (LON:CAN), through deals with the company’s three largest shareholders - Emerging Capital Partners (50.02%), HBD Zim Investments Ltd (28.18%) and Investec Asset Management (10.48%). New Dawn said that the investment represents a substantial increase in its gold mining business, as well as a focus on, and commitment to, the Zimbabwe gold mining industry.
IPSA Plc (LON:IPSA) is set to join the power-supply efforts in South Africa, during a peak period as the country hosts the FIFA World Cup 2010. The company has arranged a short-term loan facility of £300,000 to restart operations at its power generation plant in Newcastle to supply electricity during the remainder of June, under a short-term power purchase agreement with Eskom Holdings Ltd.
Large Cap News
Hammerson PLC (LON:HMSO) has exchanged conditional contracts to sell a 75 percent interest in the Espace Saint Quentin shopping centre, Saint Quentin-en-Yvelines near Paris, to Allianz Real Estate GmbH.
Land Securities (LON:LAND) said it has agreed to forward sell its proposed 310,000 square feet retail, office and residential development at Park House on London’s Oxford Street to Barwa Real Estate QSC.