Overview: the FTSE 100 turned early gains into losses after US non-farm payrolls data showed that 85,000 more jobs were lost in December after a decline of just 11,000 in the previous month with most analysts expecting an increase. The jobless report that also came out today said that the unemployment rate remained at 10% in December, unchanged from the previous month.
The UK blue chip index was down 0.3% in mid afternoon with mining and financial stocks leading the retreat.
Base metal focused miner ENRC (LSE: ENRC) led the blue chips with a 5% climb, while interdealer broker ICAP (LSE: IAP) and insurer Aviva (LSE: AV) also made it to the top three with gains of about 2.5%. Other notable risers included cruise operator Carnival Corporation (LSE: CCL), engineering firm Invensys (LSE: ISYS) and banking group Barclays (LSE: BARC), which all gained more than 1.5%.
Software developer Autonomy Corporation (LSE: AU) was at the bottom of the pile with a 2.7% decline. Clothing retailer Next (LSE: NXT) and hedge fund manager Man Group (LSE: EMG), which got downgraded to “equal-weight” from “overweight” by Morgan Stanley (NYSE: MS) today, followed with losses of 2%. Other notable fallers included mobile satellite company Inmarsat (LSE: ISAT), defence contractor Cobham (LSE: COB) and mobile operator Vodafone (LSE: VOD), all of which gained more than 1%.
Futures for the Dow Jones Industrial Average, the S&P 500 index and the NASDAQ composite inched lower following the disappointing jobs data, signalling a lower open in the US stock market.
Commodities
Oil prices slid as the US Dollar strengthened ahead of today’s key economic updates that are due out in the US. The crude futures rally approached a dead end yesterday after US inventories of gasoline unexpectedly increased by 3.74 million barrels and supplies of distillate fuel decreased by 233,000 barrels, which was a lesser decline than expected and provided for enough energy supplies for the ongoing period of unusually cold weather, which drove up the demand for oil and put the crude prices at its highest level in more than a year.
February Brent Crude slid to US$81.21/barrel, while US light, sweet crude declined to US$82.40/barrel after climbing above US$83/barrel two days ago.
Oil and gas blue chips didn’t show much movement in the morning. Shell (LSE: RDSB) declined 1.4%, while supermajor BP (LSE: BP) posted an insignificant loss, as did fellow FTSE 100 constituents BG Group (LSE: BG) and Tullow Oil (LSE: TLW).
Cairn Energy (LSE: CNE) was flat.
Amec (LSE: AMEC) also posted a small loss, while fellow service company Petrofac (LSE: PFC) was down 1.1%.
Midcaps did slightly better as JKX Oil & Gas (LSE: JKX) climbed 2%, while Heritage Oil (LSE: HOIL) added 1.2% and Salamander Energy (LSE: SMDR) rose marginally. Dana Petroleum (LSE: DNX), Soco International (LSE: SIA), Dragon Oil (LSE: DGO), Melrose Resources (LSE: MRS) and Premier Oil (LSE: PMO) were little moved.
Wood Group (LSE: WG) led the service companies with a 3% advance, while peer Wellstream Holdings (LSE: WSM) remained flat.
Energy investor Xtract Energy PLC (AIM: XTR) was one of the top performers in the sector with a 7% advance after upping its stake in Elko Energy to 50.01%. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) followed with a 5% gain, while Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and North America focused oil & gas junior Pantheon Resources (AIM: PANR) both added 4%.
US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) headed in a different direction with a 4.5% loss.
Miners mixed as gold and silver come under pressure
A stronger US Dollar put pressure on precious metal prices as well, pushing gold down to US$1,120/oz just a day after the yellow metal climbed above US$1,130/oz.
Gold has been in selling mode over the past few days as holdings in the biggest gold-backed fund SPDR Gold Trust (NYSE: GLD) fell 0.04% to 1,126 metric tonnes after declining to 1,128.75 metric tonnes on Monday, marking a decline of 4.87 metric tonnes from the end of 2009.
Other precious metals headed in different directions with silver following gold and sliding to US$18.11/oz, while platinum inched higher to US$1,557/oz.
Major mining stocks were mixed today. Gold miner Randgold Resources (LSE: RRS) lost nearly 1%, while silver miner Fresnillo (LSE: FRES) added 1.2% and platinum miner Lonmin (LSE: LMI) was unmoved.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) also made little headway.
Aquarius Platinum (LSE: AQP) took the lead in the FTSE 250 with a 2.4% advance, while silver producer Hochschild Mining (LSE: HOC) added 1.2% and gold miner Petropavlovsk (LSE: POG) declined marginally.
South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) led the juniors with a 10% surge, while South Africa focused emerging platinum producer Platmin (AIM: PPN) rose 5.5%. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Africa focused gold miner Pan African Resources (AIM: PAF) also were in demand, tacking on 4.5% and 4% respectively.
Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) added 3.5%.
Philippines focused gold producer Medusa Mining (AIM&ASX: MML) slid 3.5% on no news today.
Copper and nickel slide
Base metals were in retreated today with copper and nickel sliding to US$3.38/lb and US$8.17/lb, while zinc was down to US$1.14/lb.
Base metal focused stocks were mixed. Eurasian Natural Resources (LSE: ENRC) led the sector with a 5.5% climb, while Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA) followed, advancing 2.5% and 2% respectively. Vedanta Resources (LSE: VED) and Anglo American (LSE: AAL) added nearly 1%, while Rio Tinto (LSE: RIO) rose marginally and Antofagasta (LSE: ANTO) was flat.
BHP Billiton (LSE: BLT) went against the tide, posting a small loss.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, tacking on 1.3%.
Uranium miner Forte Energy (AIM: FTE) performed very well today, rallying 12.5%.
South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR) rose 4%, while London Mining (LSE: LOND) added 3.5%.
Copper and nickel explorer Regency Mines (AIM: RGM) slid 3% on no news.
Banks, insurance, private equity
Most financial stocks were in buying mode today. Barclays (LSE: BARC) led the banking sector with a 1.7% gain, while part-nationalised Royal Bank of Scotland (LSE: RBS) followed, climbing 1%.
Standard Chartered (LSE: STAN) rose marginally, while HSBC (LSE: HSBA) and another bailed out bank Lloyds (LSE: LLOY) made little headway.
Aviva (LSE: AV) and Legal & General Group (LSE: LGEN) were the top performers in the insurance sector with gains of 2.5%. Standard Life (LSE: SL) and Prudential (LSE: PRU) added 2% and 1%, while Admiral Group (LSE: ADM) rose marginally.
Old Mutual (LSE: OML) and RSA Insurance Group (LSE: RSA) posted small losses.
Private equity group 3i (LSE: III) rose marginally.
Small Cap Movers
Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS) with a 6% climb. Renewable energy company SeaEnergy (AIM: SEA) rallies 7% after getting awarded the 1.3GW (gigawatt) Moray Firth site offshore Scotland in UK Round 3. Direct marketing software developer smartFOCUS (AIM: STF) also was on the rise, adding 4%.
Large and Mid Cap News
FTSE 250 listed investment group Aberdeen Asset Management (LSE: ADN) agreed to acquire certain fund management assets of the government supported UK bank, the Royal Bank of Scotland (LSE: RBS). Under the terms of the deal, Aberdeen will pay £84.7 million for an established ‘funds of funds’ business. In a separate statement, the asset management group also revealed a strong first quarter.
Industrial engineering group Spirax-Sarco (AIM: SPX) expects its full year profits to eclipse the top of the current range of analysts’ forecasts after sales improved 3% year-on-year in 2009, while the trading margin is expected to be similar to last year’s 17.1% as material costs were lower and trading volume in the second half of the year was slightly higher.
In a trading update, UK based bingo hall and casino operator the Rank Group (LSE: RNK) said its earnings for 2009 will be significantly higher than in the previous year, reaching the upper end of analyst expectations. The FTSE250 gaming company announced a 3% increase in group revenues for the 52 weeks to 27th December 2009, driven by the expansion of its casinos business.
In a trading update, the Restaurant Group (LSE: RTN) said it experienced strong like-for-like sales growth in the final six weeks of the year ended 27 December, reflecting a further strengthening in trading. Furthermore the group expects 2009 full year results, which are scheduled for release in March, to be well ahead of the top end of market forecasts.
Mitchells and Butlers (LSE: MAB) have started the new financial year strongly according to this mornings trading update. The British pub company said its key ten day Christmas period was less affected by the poor weather conditions than expected, as they achieved 4.9% sales increase over Christmas and New Year. Investors cheered the news, with shares surging over 8% this morning.
The London Stock Exchange Group (LSE: LSE) revealed that the traditionally quiet trading month of December experienced a year-on-year decline in electronic trading volumes in 2009. The 13.3 million order book trades last month reflect a combined value of £108.4 billion across the group’s trading platforms, equating to an 18% decrease in the daily average number of executed trades and a 6% decline in the trade value.
Small Cap News
Gold and copper explorer KEFI Minerals PLC (AIM: KEFI) said it has successfully placed 32,187,500 shares at a price of 1.6 pence each, raising approximately £515,000 before expenses to use as additional capital to fund on-going strategic initiatives and further exploratory work on its highly prospective exploration areas in Turkey and Saudi Arabia.
Xtract Energy (AIM: XTR) entered an agreement with Elko Energy’s second largest shareholder, Oakville Capital, to acquire its entire 13.2% stake in the company in a cash and share deal to bring its total shareholding In Elko to 50.02%.
Focus Solutions Group (AIM: FSG) has extended its deal with comparison quotation portal for Life & Pension products Assureweb to share the transactional based revenue for all electronic applications that are submitted via the portal within its product suite 'focus:360°', which sources comparative quotations and new business applications for the products.
In a year end trading update, IT focused recruitment firm InterQuest Group (AIM: ITQ) announced they are doubling their full year dividend to 2 pence per share as its expects to report full year results in-line with market expectations. The company reported a stronger final quarter in its core businesses, with permanent placement fees increasing significantly.
Beacon Hill Resources (AIM: BHR) has entered into an exclusivity agreement with Borneo Mining for the potential acquisition of Minas Moatize, which owns and operates a coal mine in Mozambique with an estimated resource of 33 Mt (million tonnes) of coal, and raised £1.25 million through a placing to fund the due diligence process.
Toronto and London fixed and mobile wireless broadband solution provider, Redline Communications (TSX & AIM: RDL), slashed its guidance for the full year ended 31 December 2009.
Johnson Service Group (AIM: JSG) said trading conditions remained challenging in 2009, but its full year results will be in line with expectations as its businesses performed “satisfactorily” during the year.
Shares in SeaEnergy PLC (AIM: SEA) soared after the company this morning confirmed that its joint venture with Portugal’s EDP Renovaveis S.A. (EDPR) was awarded acreage by The Crown Estate to develop offshore wind farms in the Moray Firth, Scotland, with an approximate installed capacity of 1.3 GigaWatt as part of the UK Round 3 awards, enough to power 730,000 homes.
Platinum Australia Limited (ASX: PLA; AIM: PLAA) and Japan Oil, Gas and Metals National Corporation (JOGMEC) have struck an agreement by which JOGMEC will earn an initial 35% interest in the Stellex North Project in South Africa, by providing US$3.5 funding for exploration over the next 4 years.
Richard Branson’s financial services business, Virgin Money, announced the proposed £12.28 million acquisition of UK based private bank, the Church House Trust. The acquisition marks the group’s entrance into the retail banking industry; it will subsequently allow Virgin Money to offer customers current accounts and other banking services in addition to its credit card, savings and investment businesses.
Medical technology group Biocompatibles International PLC (LSE: BII) said it had an “excellent year in 2009”, and that revenue and year-end cash levels came in ahead of its previous guidance. It is forecasting an around 13 percent rise in revenue for the full-year 2010 and plans to pay a dividend of 6.25 pence a share, a 25 percent rise over the 2009 maiden payout.
Uruguay Mineral Exploration (AIM: UGY, TSX-V: UME) has completed the acquisition of Fortune Valley (TSX-V: FVX) in a cash and share deal, also announcing a change in name to Orosur Mining and a change in its trading symbol to OMI, which will come into effect on 8 January on the TSX Venture Exchange and 11 January on the AIM market.