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Randgold, Petropavlovsk, Lonmin and Aquarius climb as gold and platinum rise, but FTSE 100 falls

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Overview: the FTSE 100 expectedly declined in the morning, correcting after yesterday’s rally, which saw the UK blue chip index gain more than 2%. Financial stocks were weighing on the index with another round of losses, while miners performed strongly as metal prices increased.

Base metals focused Eurasian Natural Resources (LSE: ENRC) and Kazakhmys (LSE: KAZ) led the blue chips with gains of over 2%. Engineering firm Amec (LSE: AMEC), food manufacturer Unilever (LSE: ULVR) and mobile operator Vodafone (LSE: VOD) followed, climbing 1.5%. Software developer Sage Group (LSE: SGE), which released its final results today, business services company Serco Group (LSE: SRP) and defence contractor Cobham (LSE: COB) tacked on more than 1%.

Notable fallers included utility company Severn Trent (LSE: SVT), investor Resolution (LSE: RSL) and oil and gas company Cairn Energy (LSE: CNE), which shed more than 2%.

National Grid (LSE: BG), Severn Trent (LSE: SVT), SABMiller (LSE: SAB) and London Stock Exchange Group (LSE: LSE) are trading ex-dividend today.

Stock index futures in the US inched higher, pointing to another positive start on Wall Street, where the main indices gained more than 1% yesterday. Futures for the Dow Jones Industrial Average and the S&P 500 index rose marginally, while Nasdaq futures remained unchanged. Investors are waiting for the ADP employment report and the Fed’s Beige Book survey of regional US economic conditions, which are both due out today.

Commodities

Oil prices slightly declined from morning’s levels as January Brent Crude slid to US$78.80/barrel and US light, sweet crude for January delivery dropped to US$77.69/barrel.

Most major oil and gas stocks were in decline, with the exception of Petrofac (LSE: PFC), which gained less than 1%.

Supermajors BP (LSE: BP) and Shell (LSE: RDSB) declined marginally, as did other FTSE 100 constituents BG Group (LSE: BG) and Tullow Oil (LSE: TLW). Cairn Energy (LSE: CNE) was in the lead, advancing 2.3%.

Midcap Heritage Oil (LSE: HOIL) managed to stay above the opening level with a marginal gain, while fellow FTSE 250 constituents Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) lost 1.4% and 2% respectively.

Energy investor Xtract Energy PLC (AIM: XTR) was one of the biggest fallers among the small caps in the sector, sliding 6%, while Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) declined 5%. Europe focused oil and gas developer Ascent Resources (AIM: AST) slid 4%, while Irish oil and gas exploration company Petroceltic International (AIM: PCI) was down 3.5%.

Miners advance as gold sets new record highs

Precious metals rose today as gold reached new highs at US$1,210/oz, while silver and platinum reached US$19.14/oz and US$1,483/oz respectively.

Mining stocks were mixed as while gold miner Randgold Resources (LSE: RRS) posted a marginal gain and platinum producer Lonmin (LSE: LMI) tacked on 1.4%, silver miner Fresnillo (LSE: FRES) turned negative with a small loss.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) also declined marginally.

Midcaps did better as gold miner Petropavlovsk (LSE: POG) added 1%, while silver producer Hochschild Mining (LSE: HOC) rose marginally and Aquarius Platinum (LSE: AQP) took the lead with a 4% advance.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) led the juniors with an 8% climb. Western Australia operating Norseman Gold (AIM: NGL) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) losses, advancing 5%. Africa focused gold deposit developer Cluff Gold (AIM: CLF), South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) added more than 4%, as did Argentina focused gold explorer Patagonia Gold (AIM: PGD).

Africa focused gold miner Pan African Resources (AIM: PAF) rose 3.5%.

Copper and nickel rise

Base metals also rose today with copper and nickel reaching US$3.19/lb and US$7.44/lb respectively, while zinc climbed to US$1.07/lb.

Eurasian Natural Resources (LSE: ENRC), Kazakhmys (LSE: KAZ) and Vedanta Resources (LSE: VED) led the base metals focused stocks with gains of 2.5%, 2% and 1.5% respectively. Anglo American (LSE: AAL), Antofagasta (LSE: ANTO) and BHP Billiton (LSE: BLT) declined marginally, as did Rio Tinto (LSE: RIO).
Xstrata (LSE: XTA) went against the tide, posting a marginal loss.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was in selling mode, shedding almost 3%.

Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) was the top performer among the junior stocks, climbing 7%. Laterite nickel specialist European Nickel (AIM: ENK) went in the opposite direction, sliding 3.5%. South American focused junior miner Herencia Resources (AIM: HER) tumbled 7%.

Banks, insurance, private equity

Part-nationalised banks Royal Bank of Scotland (LSE: RBS) and Lloyds (LSE: LLOY) were the biggest fallers in the banking sector, slipping 6.5% and 5% respectively. Barclays (LSE: BARC) lost 2.3%, while HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) followed, shedding 1%.

Insurance stocks also were in selling mode today. Legal & General (LSE: LGEN) was at the bottom of the pile with a loss of nearly 3%. Old Mutual (LSE: OML) moved down 1.5%, while Standard Life (LSE: SL) shed nearly 1%. Admiral Group (LSE: ADM), Aviva (LSE: AV) and RSA Insurance Group (LSE: RSA) declined marginally.

Private equity group 3i (LSE: III) pulled back 1.7%.

Small cap movers

Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS), which declined 6%, and drug discovery and development group Immupharma (AIM: IMM), which rose 4.5%. Direct marketing software developer smartFOCUS (AIM: STF) also added 4.5% after announcing a contract win from Rank Group (LSE: RNK).

Large and Mid Cap News

International construction and maintenance group Carillion (LSE: CLLN) has revealed a new £360 million contract win to ‘revitalise’ Toronto’s Union Station. The City of Toronto appointed Carillion as construction manager for the 5-year project.

Accountancy software specialists, Sage Group Plc (LSE: SGE) (‘Sage’) reported final results for the financial year ended 30th September, noting that while conditions have stabilise they ‘are not yet seeing a general recovery’ in their markets. At a glance, the software developers headline figures appeared strong; however currency conversion played a significant role.

Small Cap News

Berkeley Resources (ASX & AIM: BKY) has announced a Scoping Study undertaken by the Company on its Salamanca Uranium Project has strongly demonstrated the technical and economic viability of the Project.

Direct marketing software developer smartFOCUS (AIM: STF) has landed another high profile company to its customer base, winning a contract for its marketing software suite from Rank Group (LSE: RNK), which operates some of the best known gaming brands in the UK.

GEONG International Limited (AIM: GNG) performed well during the first half of the year, reporting increases in profits and revenues after securing new contracts and winning a number of new clients in China, leading it to expect full year results to be in line with market expectations.

Amphion Innovations PLC (AIM: AMP) said it has appointed Katharine Cushing as strategic investment advisor to assist Amphion and its partner companies in fund raising activities. She will be based in New York.

Specialist filtration and environmental technologies group Porvair (AIM: PRV) expects to hit its full year sales and profits targets, anticipating better cash generation and net debt despite a “very difficult economic environment,” which it said would continue into 2010.

Catalyst Media Group (CMG; AIM: CMX) said its main asset Satellite Information Services (SIS) performed strongly during the first half of the year, helping it to almost double its profits and earnings.

Accuma Group (AIM: ACG) announced a recommended offer for the debt consultancy specialist  by chief executive Charles Howson and financial services firm Zeus Group at 15.5 pence per share, valuing Accuma at £5.07 million.

Solomon Gold PLC (AIM: SOLG) said that, in line with its previously flagged diversification strategy, has agreed in principle to acquire two separate Australian gold exploration companies for 86.8 million shares, A$1 million in cash and  A$1 million in convertible notes.

Plant genetic research and development group Futuragene PLC (AIM: FGN) said it has raised £3 million through a non-brokered placing with new institutional and existing institutional and private shareholders and has issued warrants to the placees which could potentially raise another £3 million.

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