Overview: the FTSE 100 rose in the afternoon following a flat start after the US GDP update was released around noon, reporting a 0.7% decline in the second quarter, while a 1% contraction was expected.
However, any positive impact from the update was erased later when a fall in the Chicago PMI index was reported, showing lower factory activity in September with a decline to 46.1 from 50 in August, while an improvement to 52 was expected. The news sent stock markets sliding with the Dow Jones industrial average in the US and the FTSE 100 both losing over 1%.
Precious metals declined in response to the negative trends in the market, but then quickly rebounded, with Gold returning to US$1,001/oz.
Fund manager Man Group (LSE: EMG) remain in the lead with a 6.6% surge, while technology firm Smiths Group (LSE: SMIN) followed with a 5.3%. Insurers were strong as Legal & General (LSE: LGEN), Aviva (LSE: AV), RSA (LSE: RSA) and Standard Life (LSE: SL) all made it to the leaderboard.
Tour operators TUI Travel (LSE: TT) and Thomas Cook (LSE: TCG) emerged as the leading fallers in the FTSE 100, shedding over 4%. Commercial property company Liberty International (LSE:: LII) joined in with a 4.5% slide.
Clothing retailers Next (LSE: NXT) and Marks & Spencer (LSE: MKS) followed with losses of over 3%.
Commodities
Oil prices inched up today with Brent Crude for November delivery improving to US$66.8/barrel, while US light, sweet crude for November delivery improved to US$68.2/barrel.
Oil and gas stocks moved with the market as it tanked late in the afternoon, with most blue chips declining 1-2%.
Cairn Energy (LSE: CNE) managed to hold on, while fellow FTSE 100 constituents Petrofac (LSE: PFC), BG Group (LSE: BG) and Tullow Oil (LSE: TLW) all were in decline, shedding 1.5%, 2% and 3.4% respectively.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) also switched to selling mode, with both shedding 1.8%.
With the exception of Dragon Oil (LSE: DGO), which held on to a 1.3% gain, mid caps also declined as Dana Petroleum (LSE: DNX) and Heritage Oil (LSE: HOIL) lost less than 1%.
Most juniors rose on Wednesday. Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was in the lead with a 16% rally. Canadian focused oil and gas group Enegi Oil (AIM: ENEG) also did well, climbing 7%, while European focused oil and gas developer Ascent Resources (AIM: AST) and Iraq operating Irish oil company Petrel Resources (AIM: PET) all added more than 5%. Energy investor Xtract Energy PLC (AIM: XTR) tacked on 4%.
US focused junior Empyrean Energy (AIM: EME), Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP), Kazakhstan focused Max Petroleum (AIM: MXP) and Russian focused gas producer Volga Gas (AIM: VGAS) all climbed over 2%.
Pan Andean Resources (AIM: PRE) declined 3.6%, while fellow South American focused company Gold Oil (AIM: GOO) recovered from early losses to finish with a small gain.
Precious metals
Gold slipped to US$995/oz, but quickly returned to US$1,001/oz. Silver held steady at US$16.38, while Platinum stopped just US$3 short of US$1,300/oz.
Mining stocks slid together with the prices. Gold producer Randgold Resources (LSE: RRS) slipped into the red late in the afternoon and silver miner Fresnillo (LSE: FRES) declined 1.3%. Fellow FTSE 100 constituent platinum miner Lonmin (LSE: LMI) had its gains trimmed to 1.6%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined 2.2%. Yamana Gold (LSE: YAU) went against the tide, rising 3.4%.
In the FTSE 250, Petropavlovsk (LSE: POG) held on to a gain of slightly more than 1%, while fellow mid caps Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) lost about 1%.
Juniors were mixed with most small caps turning negative.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) led the fallers with a 14% dip. Turkey focused gold miner Ariana Resources (AIM: AAU) followed with a 6% loss. Australian gold and copper prospector Solomon Gold (AIM: SOLG) and South American focused Mariana Resources (AIM: MARL) lost more than 4%. Tajikistan operating gold miner Kryso Resources (AIM: KYS) and Turkey focused gold miner Stratex International (AIM: STI) both shed about 3%.
Base metals
Copper rose to US$2.76/pound, Nickel improved to US$7.84/pound and Zinc inched up to US$0.86/pound.
Except for Eurasian Natural Resources (LSE: ENRC), which managed to hold on to a small gain, all base metals focused miners were in decline on Wednesday. Anglo American (LSE: AAL) was in the lead with a 3% fall. BHP Billiton (LSE: BLT) and Vedanta Resources (LSE: VED) both declined over 1.5%, while Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA). Antofagasta (LSE: ANTO) and Rio Tinto (LSE: RIO) declined less than 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, shedding 2%.
Specialty minerals exploration and development company Thor Mining (AIM: THR) and tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) both dipped 16% to emerge as the leading fallers in the sector.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and Australia focused coking coal producer Caledon Resources (AIM: CDN) both shed 4.7%.
Coking and thermal coal producer New World Resources (LSE: NWR) and Mineral sands producer Kenmare Resources (LSE: KMR) declined 3.5%.
Banks, insurance, private equity
All major banking stocks were on decline after making gains in the morning. HSBC (LSE: HSBA) led the pack with a 2.5% decline. Standard Chartered (LSE: STAN) and Royal Bank of Scotland (LSE: RBS) lost less than 1%, as did Barclays (LSE: BARC). Bailed oil bank Lloyds (LSE: LLOY) shed 2.1%.
Insurers did better. Legal & General (LSE: LGEN) led the financial stocks with a 5% climb, while RSA Insurance Group (LSE: RSA) added 3%. Aviva (LSE: AV) and Standard Life (LSE: SL) rose about 2%.
Sector peers Friends Provident (LSE: FP) and Old Mutual (LSE: OML) were in decline, shedding 2.2% and 1.2% respectively. Prudential declined less than 1%.
Private equity group 3i (LSE: III) ended the day with marginal losses.
JP Morgan Chase (LSE: JPM) rose 3%.
Small Cap Movers
Other notable movers among the small cap included Rubicon Software (AIM: RUBI), which lost 6.7%.
Large and Mid Cap News
UK highstreet retailer Marks & Spencer Plc (LSE: MKS) released its second quarter trading statement this morning, highlighting a relatively strong performance across the group with overall group sales rising 2.7%.
Small Cap News
Northern Petroleum PLC (AIM: NOP) reported interim results, saying the achievement of significant levels of production is imminent and the oil price seems to be settling at a satisfactory level as are the European gas prices.
Leni Gas & Oil PLC (AIM: LGO) said although the market conditions remain challenging, the directors are excited about the prospects for the company in the next 18 months, as it reported results for the first half to June 30 2009.
South American mineral exploration company Mariana Resources (AIM: MARL) announced that their exploration efforts in the first six months of the financial year continued to generate targets.
Hanson Westhouse issued a note on Stratex International PLC (AIM: STI), following this week’s news of an option/joint venture agreement with Teck Resources Ltd’s (TSX, NYSE: TCK) Turkish unit to advance the Hasancelebi gold project.
Kalahari Minerals PLC (AIM: KAH), the exploration and evaluation group with a portfolio of uranium, copper and base metal interests in Namibia, narrowed its pretax loss in the first half to June 30 2009 to £3.48 million from £10.35 million a year earlier.
Regency Mines PLC (AIM: RGM) said the exclusivity period agreed with Sydney-based Direct Nickel Pty Ltd (DNi) in connection with assessing the possible joint development of Regency’s Mambare nickel-cobalt project in Papua New Guinea has been extended indefinitely by mutual agreement.
Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico, said following a sale of shares on September 25 2009, John Dorrier now holds 6,876,367 shares in the company, representing 5.72% of the total issued share capital.
Specialty minerals exploration and development company Thor Mining (AIM: THR) said conditions remained difficult in the full-year to end June 2009, and the low molybdenum and tungsten prices still did not justify imminent construction and development at its flagship project Molyhil, which it said still had sound fundamentals. It is still expecting development to commence in the mid-term, projecting further improvement in prices.
Tajikistan focused miner Kryso Resources PLC (AIM: KYS) said the bankable feasibility study for the Pakrut gold project is on track for completion before the end of 2009, and it expects to report an updated and increased JORC-compliant resource estimate for Pakrut shortly.
Iodine and natural gas exploration and production company Iofina (AIM: IOF) reported good results from the recently acquired H&S Chemical, while expecting the progress of its flagship Atlantis prospect in Montana to be consistent after experiencing slowdowns that put the development behind the initial schedule.
Shares in Iraq and Algeria operating oil and gas junior Gulf Keystone Petroleum (AIM: GKP) were in demand this morning after the company upped its estimation of the total barrels of oil in place in the Shaikan structure in Iraq to 2 and 4 billion barrels after preliminary log results from the Shaikan-1 well indicated an additional oil pay of about 80 metres from the Butmah formation to previously announced discoveries in the Sargelu, Alan and Mus formations.
EMED Mining Public Ltd (AIM: EMED) said it still plans to restart the Rio Tinto copper mine in Spain’s Andalucia province in 2010, targeting start-up of production at the end of the year, and added it is considering the merit of an additional listing on the Australian Stock Exchange.
Mercator Gold (AIM: MCR) sold 8 million shares in Australia’s Silver Swan Group Ltd (ASX: SWN) it received in April 2008 upon the sale of the Meekatharra tenements to Silver Swan. Mercator was issued 10 million ordinary shares and 4 million performance shares.
Emerging South African power producer IPSA Group Plc (AIM: IPSA) said it has initiated discussions with a number of private sector parties regarding power offtake arrangements that would allow the Newcastle combined heat and power plant in the country to restart operations.
Eastern European focused junior Aurelian Oil & Gas (AIM: AUL) reported higher turnover for H1, saying its revenue stream was “more than sufficient” to cover its expenses with drilling and seismic acquisition programmes planned for its key projects for H1 2009 and 2010.
West African focused gold mining group Cluff Gold (AIM: CLF, TSX: CFG) announced its interim results for the six months ended 30 June 2009. According to the statement Cluff Gold is on course to achieving its forecast annualised production rate of 100,000 ounces of gold.
Biopharmaceutical junior Lipoxen (AIM: LPX) posted narrower H1 losses and announced it was appointed as lead member of the Technology Strategy Board’s grant consortium for its controlled-release nanoparticle vaccine research programme which includes Lipoxen's influenza vaccine project.
Interactive Gaming and Media company NetPlay (AIM: NPT) updated investors on their performance through the first half of the year. The highlights of the interim report showed that ‘Total Gross Bets’ increased by 31% across the group while ‘mobile gaming’ margin revenues increased 450% compared to the same period last year.
Africa focused oil producer Dominion Petroleum (AIM: DPL) reported narrower losses in the first half and new investment to fund next year’s drilling campaign, while still looking for farm-out partners for its EA4B block in Uganda.
Dual listed oil & gas explorer Range Resources (AIM: RRL, ASX RRS) updated investors on the progress being made on the Smith #1, joint venture exploration well in the North Chapman Ranch, Texas.
Junior Oil & Gas producer Resaca (AIM: RSX and RSOX) announced a proposed merger with Cano Petroleum, Inc. (NYSE Amex: CFW). The boards of directors of both companies have unanimously approved a definitive plan to merge the two companies in a tax-free, stock-for-stock exchange.