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FTSE 100 climbs 1.6% as Wall Street rallies, commodities rise to boost mining and energy stocks

Last updated: 20:52 04 Nov 2009 GMT, First published: 21:52 04 Nov 2009 GMT

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Overview: the FTSE 100 gained more strength in late afternoon after tacking on 0.8% in early trade. The UK blue chip index got more help from a bullish start in the US market, where the Dow Jones industrial average rallied 1.3% to start the day. Other main indexes, S&P 500 and the Nasdaq composite posted similar gains of over 1% ahead of the Fed’s statement on its interest rates.

The FTSE 100 doubled its early gains to tack on 1.6%, eclipsing the 5,100 mark just a day after slipping below 5,000. Silver miner Fresnillo (LSE: FRES) and tour company Thomas Cook Group (LSE: TCG) beat out clothing retailers Marks & Spencer (LSE: MKS) and Next (LSE: NXT), which added 6% and 7% after releasing positive updates in the morning, for the lead in the FTSE 100, advancing 8.7% and 7.1% respectively.

Insurer Aviva (LSE: AV) also did well after reaffirming its full year guidance despite a slide in pension and life sales, adding 6.7% along with Kazakhmys (LSE: KAZ). Thomas Cook’s sector peer TUI Travel (LSE: TT) joined in later, climbing 5.7%.

Home Retail Group (LSE: HOME) and airline British Airways (LSE: BAY) were other non-commodity focused stocks to make it to the leaderboard with gains of over 5.5%. Cairn Energy (LSE: CNE) also added 5.5% after oil prices rose to lift the energy sector.

Bailed out bank Lloyds (LSE: LLOY) slid 1.8%, giving away most of its yesterday’s gains. Chocolatier Cadbury (LSE: CBRY), which has set a November 9 deadline for American food giant Kraft to come back with a better offer for the company, and specialist distribution group Bunzl (LSE: BNZL) were the only other FTSE 100 constituents to shed more than 1%.

Commodities

Oil prices rose with December Brent Crude coming within sight of US$80/barrel in late afternoon, while US light, sweet crude for December delivery was just 10 cents short of US$81/barrel.

With the exception of Shell (LSE: RDSB), which posted marginal losses, all major oil and gas stocks responded to the price increases with gains. Another supermajor BP (LSE: BP) tacked on a small gain.

BG Group (LSE: BG) did better, rising 2.5%, while Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) added 3.5% and 4.5% respectively.

Cairn Energy (LSE: CNE) outperformed fellow blue chips with a 5.4% climb.

Midcaps also did well as Heritage Oil (LSE: HOIL) gains 4.2% and Dana Petroleum (LSE: DNX) rose 2.4%. Dragon Oil (LSE: DGO) posted insignificant gains.

Small caps showed little movement today with only a few exceptions. North American focused oil & gas junior Pantheon Resources (AIM: PANR) led the juniors with a 4.3% climb. Mongolia-focused Petro Matad Ltd (AIM: MATD) led the fallers with a slide of almost 9%, while Europe focused oil and gas developer Ascent Resources (AIM: AST) and energy investor Xtract Energy PLC (AIM: XTR) followed with losses of 4.2% and 3.3% respectively.

Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) tumbled 6%.

Gold and silver boost mining stocks

Precious metals were on the rise today, giving a boost to the mining sector. Gold was just $8 short of US$1,100/oz, while Silver and Platinum improved to US$17.54/oz and US$1,371/oz respectively.

Silver miners were in the lead with Fresnillo (LSE: FRES) rallying 9% and peer from the FTSE 250 Hochschild Mining (LSE: HOC) surging 9.5%. Gold miners followed as midcap Petropavlovsk (LSE: POG) added 5.4% and FTSE 100 miner Randgold Resources (LSE: RRS) tacked on 4.3%.

Platinum miner Lonmin (LSE: LMI) climbed 4.3%, while mid tier platinum producer Aquarius Platinum (LSE: AQP) moved up 3.9%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose 3.3%.

Most small caps did well.

Copper and gold miner EMED Mining (AIM: EMED) led the juniors with a 16% rally. Australian gold and copper prospector Solomon Gold (AIM: SOLG) followed with a 10% gain, while Western Australia operating Norseman Gold (AIM: NGL) and Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) climbed 9% and 8% respectively.

Brazil focused gold miner Horizonte Minerals (AIM: HZM) rose 6.5%, while Philippines focused gold producer Medusa Mining (AIM&ASX: MML), Africa focused gold miner Pan African Resources (AIM: PAF) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) all added about 5.5%.

South American based explorer Mariana Resources (AIM: MARL) went against the tide, shedding 4.5%.

Copper and nickel rise

Copper and Nickel were on the rise today, reaching US$2.99/lb and US$8.32/lb respectively, while Zinc climbed back to US$1/lb.

Kazakhmys (LSE: KAZ) was in the lead with a 7% climb. Antofagasta (LSE: ANTO) and Vedanta Resources (LSE: VED) followed, advancing nearly 5%, while Xstrata (LSE: XTA) tacked on 5.5%.

Eurasian Natural Resources (LSE: ENRC) was up 4.5%, while BHP Billiton (LSE: BLT) and Anglo American (LSE: AAL) added 3%. Rio Tinto (LS: RIO) rose 2.5%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed the market with a 6.8% rally.

Juniors didn’t show much movement on Wednesday with the exception of Australia focused coking coal producer Caledon Resources (AIM: CDN), which led the sector with a 10% climb, and South Africa operating chrome miner Chromex Mining (AIM: CHX), which went in the opposite direction, sliding 9%.

Banks, insurance, private equity

With the exception of Lloyds (LSE: LLOY), major banking stocks did well today. Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) were in the lead with gains of 4.5% and 3.8% respectively. Royal Bank of Scotland (LSE: RBS) rose 2.5%, while HSBC (LSE: HSBA) added 1.5%.

JP Morgan Chase (LSE: JPM) climbed 1.8%.

Insurers were in buying mode today. Aviva (LSE: AV) led the pack, rising 6.3%. Old Mutual (LSE: OML) and Prudential (LSE: PRU) followed, gaining over 4%. RSA Insurance Group (LSE: RSA) and Legal & General (LSE: LGEN) both posted gains of over 2%, while car insurer Admiral Group (LSE: ADM) added 1.3%.

Standard Life (LSE: SL) added 1%.

Private equity group 3i (LSE: III) performed well, tacking on 3.3%.

Small Cap Movers

Other notable movers among the small caps included mobile email and data synchronisation group Synchronica PLC (AIM: SYNC), which gained 7.5% after securing its first order for low-cost mobile devices.

Large and Mid Cap News

FTSE 250 bus, rail and air services group Go-Ahead Group (LSE: GOG), has decided to enter the North American school bus market through a 50/50 joint venture with Cook-Illinois, a family owned and operated school bus contractor in the United States.  Cook-Illinois has over 2,000 buses in 200 school districts operating in the Chicago area.

Clothing retailer Marks and Spencer Group (LSE: MKS) beat market expectations with a sales increase of 2.8% to £4.3 billion in the first half and profits of £298.3 million against the predicted £285 million, mostly driven by the strong performance of its international business where revenues and profits from M&S’ 315 stores in 41 territories climbed 12.2% and 21.1% respectively.

There was a plethora of interim management statements released this morning among the 350 largest companies listed on the LSE, but one of the most closely scrutinised was undoubtedly Taylor Wimpey (LSE: TW.) – one of Britain’s largest home builders.

Shares in Rightmove (LSE: RMV) were in demand this morning after the property search website reported “healthy growth” in revenues and earnings, driven by higher traffic to its website.

Pub chain and FTSE 250 constituent JD Wetherspoon (LSE: JDW) said it remained confident about the company’s prospects for the current financial year after total sales for the first quarter ending 25 October increased 4.5%, while like for likes were up 0.3%.

Small Cap News

Biocompatibles International PLC (LSE: BII) said its full year revenues would be closed to the upper end of the guidance after sales outpaced expectations in the third quarter, also expecting its net funds at the end of the year to top the projected £28 million.

London Mining (OSX: LOND, XETRA: L9K) said the placing of existing shares by its UK  brokers on behalf of long-term shareholders has been completed and it expects these shares to start trading on AIM under the LOND symbol on November 6 2009.

Investment banker Canaccord Adams reinforced its ‘buy’ recommendation and upped its target price for mineral sands producer Kenmare Resources (LSE: KMR) after paying a visit to its operation in Mozambique to examine the improvements and measure up the pathway to its planned 50% expansion to 1.2Mtpa (million tones per annum) of ilmenite plus associated co-products zircon and rutile.

Broker Hanson Westhouse retained its valuation of 225 pence per share and ‘buy’ recommendation for Nighthawk Energy (AIM: HAWK) after North American based junior explorer updated the market on its operations at the Xenia acreage in Kansas.

Mwana Africa PLC (AIM: MWA) said the Industrial Development Corporation of South Africa (IDC) has approved up to US$10 million debt funding for the Freda Rebecca gold mine in Zimbabwe.

Edison Investment Research updated its valuation of iron ore focused investor Red Rock Resources (AIM: RRR) following its acquisition of a 15.78% stake in Cue Resources (TSX-V: CUE), putting the company’s potential NAV at 8.70 pence in the top end scenario, which would represent a 82.8% premium to its current share price.

Blackthorn Resources Limited (ASX: BTR) has reported encouraging drilling results from Phase 3B of the drilling program conducted by its Joint Venture partner BHP at the Mumbwa  Project in Zambia.

Shares in mobile email and data synchronisation group Synchronica PLC (AIM: SYNC) were lifted by news that it received the first purchase order for the low cost mobile devices (LC devices) it is developing with third parties in a collaboration agreement. The group was not expecting sales of the devices until the 2010 calendar year.

Regal Petroleum PLC (AIM: RPT) said it was notified by Ceska Sporitelna, the Czech unit of Austria-based retail bank Erste Group Bank AG, that following share purchases on October 23, it is interested in 12,636,067 of the company's shares, representing 4 percent of the capital.

South Africa focused coal miner Strategic Natural Resources PLC (AIM: SNRP) has raised £650,000 via a placing of 6.5 million shares in the company to boost its operating liquidity in view of its plans to further grow the business by entering new promising markets.

Clean technologies developer Nviro Cleantech (AIM: NVR) has secured a €785,450 grant for its wood fibre recycling technology business Microrelease Limited to cover one quarter of the costs of development of a full scale industrial plant over 30 months starting on 1 November.

Stratex International PLC (AIM: STI) said a scoping study to identify key issues and ensure optimum fast-track development for the Inlice and Altintepe gold projects in Turkey is now complete, with recommendations by international consultancy Golder Associates being implemented.

Plexus Holdings PLC (AIM: POS), the oil and gas engineering services business that owns the POS-GRIP method of wellhead engineering, has extended by two years its framework agreement with Applied Drilling Technology International (ADTI), a turnkey drilling division of offshore drilling contractor Transocean Drilling UK Ltd.

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