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UK blue chips rouse themselves while Aim's indices run out of steam

Published: 17:44 13 May 2016 BST

Bull & bear

London's small caps succumbed to the wider gloom by the end of the day while, ironically, the Footsie rallied.

The FTSE Aim 100 closed at 3,385, down two points on the day, while the FTSE Aim All-Share gave up 0.6 at 725.5. The top-share index, the FTSE 100, put in a late spurt to finish 34 points higher at 6,139.

The Footsie's Friday finale was enough to drag the index into positive territory for the week, with a 13 point, or 0.2%, rise.

The FTSE Aim 100 remained up on the week, finishing with a 10 point rise, while the FTSE Aim All-Share banked a rise of 1.6 points.

Despite the late swoon by the Aim indices, there were still some handsome gains to be found among the small caps, with Avanti Capital PLC (LON:AVA) at the head of the herd, after the investment company announced plans to sell its stake in Mblox Inc, which is being bought out by CLX Communications.

Avanti advanced to 26.5p, up from 19p at last night's close.

Arian Silver Corp (LON:AGQ, CVE:AGQ) was golden after it said it had begun detailed metallurgical test work at the Noche Buena tailings project in northern Mexico.

At the beginning of the month, the firm paid US$25,000 for the exclusive right to evaluate the project owned by Tierra Nueva Mining.

The first batch of sampling is now underway and the company hopes to send it to a facility in Colorado for analysis within the next few days.

Investors headed for the exits at All Leisure Group PLC (LON:ALLG) as the cruise operator served notice of its intention to cancel its listing on Aim.

The shares sank 71%.

Coal of Africa Limited (LON:COAL) cooled off as the acceptance period for its offer for Universal Coal was extended. The shares shed 0.25p at 3p as the company said acceptances of its offer now stood at 93.23%.


Mid-session wrap

FTSE100 was lower at lunch, as were small caps, as traders continue to fret over Brexit potential next month and there was disappointing data from the Eurozone.

Figures showed the Eurozone economy grew less than expected in the first quarter. It came on top of news that the IMF (International Monetary Fund) also warned on the consequences of a UK exit vote on June 23.

FTSE100 was down  over 35 points at the time of writing, at 6,069, while the FTSE AIM 100 lost 0.08% to 3,384.

The FTSE AIM All share is down 0.05% to stand at 724.730.

ITV PLC (LON:ITV) was a notable blue chip faller as several brokers downgraded the stock after its half year results were issued yesterday, and as the Vote Leave campaign on the EU referendum have threatened to take legal action on the firm.

It comes after the broadcaster said its TV debate would see PM David Cameron pitted against Nigel Farage on June 7.

A big small cap loser was gold miner Aureus Mining Inc (LON:AUE), which fell almost 15% to 3.63p as it continues to be dragged down by the problems that caused processing at the New Liberty mine to be suspended last week.

The group continues to discuss with its lenders the possibility of rescheduling its debt repayments and that it is monitoring its working capital position closely.

Circle Oil PLC (LON:COP)  was top London loser, shedding 16.67% to 1.88p as it revealed the International Finance Corporation (IFC) had agreed to extend the suspension of the December 2015 redetermination and any repayments due under its Reserve Based Lending (RBL) facility until May 27 this year.

On the upside, Strategic Minerals (LON:SML) continued its impressive gains, after a recent bout of profit-taking,  to add over 21% to 0.45p each.

Serabi Gold PLC (LON:SRB) issued quarterly results and were received well.

Shares lifted 11.43% to 4.88p as the Brazil-focused miner reported a profit before tax of US$1.5mln for the first three months of 2016, up from US$191,398 the year before.

Arian Silver Corp (LON:AGQ)  climbed over 8% as it said it was making progress on detailed metallurgical test work at the Noche Buena, the tailings project over which it is running the rule.

Strat Aero PLC (LON:AERO), the unmanned drone specialist, flew almost 9% lower to 1.03p although no news was out.


Open

Small cap stocks opened little changed on balance, taking a sanguine view on the whole Brexit recession storm in a tea-cup.

The media continues to work itself into a lather over comments by Mark Carney, the governor of the Bank of England, about the prospect of a vote in favour of Britain leaving the European Union causing a technical recession.

A fairly straight bat response to a leading question at the press conference hit blue chips yesterday, and the FTSE 100 was on the down-path again this morning, down 33 points, or 0.5%, at 6,072.

“Carney spoke yesterday and there wasn’t much very surprising in what he said,” Observed Jamie Constable at N+1 Singer.

“If the UK were to vote for Brexit there would likely to be a 'technical' UK recession and sterling would likely fall and that could trigger a rise in short term interest rates,” Constable continued.

In other news, the Pope has been confirmed as a Catholic and bears disappearing into the woods like to take a roll of Andrex with them.

Things were better on Aim, where the FTSE Aim 100 was a smidgen higher at 3,388 while the FTSE Aim All-Share climbed 0.4 to 725.5.

The market's top performers were all minerals plays. Kodal Minerals PLC (LON:KOD) topped the tree, up 37% at 0.06p, though there was no news flow to explain the rise.

Likewise, Strategic Minerals PLC (LON:SML), up 23%, has not made any announcements to the market since an update on May 6 about the maiden drill programme at its Hanns Camp prospect, but the shares had recently seen a bit of profit taking having tripled in the space of three weeks, and it seems the upward march has now recommenced.

Quarterly results from Serabi Gold PLC (LON:SRB) were received well. The shares climbed 17% to 5.125p as the Brazil-focused miner reported a profit before tax of US$1.5mln for the first three months of 2016, up from US$191,398 the year before.

Sector peer Arian Silver Corp (LON:AGQ) was also wanted. Shares climbed 8.1% to a penny a pop as the Mexico-focused mine developer said it is making progress on detailed metallurgical test work at the Noche Buena, the tailings project over which it is running the rule.

Resource companies also feature prominently among the big losers, with Circle Oil PLC (LON:COP), down 17% at 1.875p, the heaviest faller after a financial update.

The up-for-sale oil and gas firm said its backer, the International Finance Corporation, has agreed to extend the suspension period in respect of repayments of borrowings by Circle.

Aureus Mining Inc (LON:AUE) continues to be dragged down by the problems that caused processing at the New Liberty mine to be suspended last week.

The shares were off almost 12% as the company said in its latest update that it continues to discuss with its lenders the possibility of rescheduling its debt repayments and that it is monitoring its working capital position closely.

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