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British Airways, Inmarsat, Wolseley, BT and Home Retail lift FTSE 100

12th Nov 2009, 4:10 pm British Airways, Inmarsat, Wolseley, BT and Home Retail lift FTSE 100

Overview: the US market was off to a volatile start this morning with the key indices recovering from an early decline to slip back into the red later. The Dow Jones Industrial Average was down 0.2%, as was the broader S&P 500 index, while the technology heavy Nasdaq composite remained above the opening level with a small gain.

Despite the mixed start in the US, the FTSE 100 managed to finish with a gain of about 0.6% after fluctuating within a narrow range around the opening level for the better part of the day. The blue chip index tacked on more than 30 points to break through the 5,300 mark just a week after slipping below 5,000.

British Airways (LSE: BAY), which had a board meeting with Spanish airline Iberia today to discuss a possible merger, was in the lead with an 8.3% rally. Satellite network operator Inmarsat (LSE: ISAT) and plumbing and heating materials manufacturer Wolseley (LSE: WOS) followed with gains of 7% and 5% respectively.

Another heavyweight telecom group BT (LSE: BT) further bolstered the Footsie, posting a 4.5% gain after upping its cost savings target along with its full year revenue and cashflow guidance.

Tour operators also were in demand with Thomas Cook Group (LSE: TCG) and Tui Travel (LSE: TT) rising about 3.5%.

Only a handful of FTSE 100 constituents lost more than 2% today, including RBS (LSE: RBS) and engineering firm AMEC (LSE: AMEC), which slid 2.5% and 3.5% respectively. Private equity group 3i (LSE: III) was at the bottom of the pile with a 4% loss.

Meanwhile, commodities declined today as the US dollar rose to weaken gold and oil prices. Oil prices were further impacted by the inventory update which came out late in the afternoon, saying US crude oil stocks rose more than anticipated.

Commodities

December Brent Crude slid to US$77.07/barrel, while US light, sweet crude for December delivery moved down below US$78/barrel.

Major oil stocks improved slightly, trimming their early losses to a minimum. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) declined marginally, as did BG Group (LSE: BG), Cairn Energy (LSE: CNE) and Tullow Oil (LSE: TLW). Petrofac (LSE: PFC) outperformed fellow FTSE 100 constituents, posting a small gain.

Midcaps failed to recover with Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) posting losses 4% and 2.5% respectively, while Heritage Oil (LSE: HOIL) managed to hold on to a marginal gain.

Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) was among the top performers in the sector, rising 7%, while energy investor Xtract Energy PLC (AIM: XTR) followed with a 6.5% gain.

Ukraine focused gas producer, Regal Petroleum (AIM: RPT) added 3% and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) advanced 2.5%.

EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and Iraq operating Irish oil company Petrel Resources (AIM: PET) headed in the opposite direction, sliding 5% and 4% respectively.

Miners fall as gold and silver weaken

Metal prices were in decline today. Gold slid to US$1,113/oz, while silver and platinum were down to US$17.41/oz and US$1,360/oz respectively.

Platinum miner Lonmin (LSE: LMI) was the top performer in the sector, making a marginal gain, while all other mining stocks in the FTSE 350 turned negative. Blue chip miners Randgold Resources (LSE: RRS) and Fresnillo (LSE: FRES) both lost 1%.

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

In the FTSE 250, Aquarius Platinum (LSE: AQP) lost 1.4%, gold miner Petropavlovsk (LSE: POG) was down 2% and silver producer Hochschild Mining (LSE: HOC) lost 3%.

Junior companies didn’t show much movement today. South Africa focused emerging platinum producer Platmin (AIM: PPN) was in the lead with a gain of almost 6%. African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO), which reported two new targets at its Tulu Kapi gold project in Ethiopia, followed with a 3.5% climb.

Copper and nickel slide

Base metals also fell as copper and nickel moved down to US$2.95/lb and US%7.38/lb respectively and zinc retreated to US$0.96/lb.

Base metals focused stocks mostly fell, however Xstrata (LSE: XTA) and Anglo American (LSE: AAL) managed to tack on 1.4% and 1.7% respectively.

Antofagasta (LSE: ANTO), BHP Billiton (LSE: BLT), Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) posted small gains, while Kazakhmys (LSE: KAZ) dropped 1.5%. Eurasian Natural Resources (LSE: ENRC) was at the bottom of the pile with a loss of 2.5%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was down marginally.

Tunisia focused metal miner Maghreb Minerals (AIM: MMS) led the sector with a 12% rise. Indonesia operating coal miner Churchill Mining (AIM: CHL) and zinc mining and recycling specialist ZincOX (AIM: ZOX) also rose, adding 6% and 5% respectively.

Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and copper and nickel explorer Regency Mines (AIM: RGM) fell, with both shedding 5%. Laterite nickel specialist European Nickel (AIM: ENK) slipped 4.5%.

Banks, insurance, private equity

With the exception of part nationalised bank Royal Bank of Scotland (LSE: RBS), which retreated 3%, major banking stocks performed well today. Another bailed out bank Lloyds (LSE: LLOY) added 1.5%, while Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) gained 1.1% and 1.9% respectively. HSBC (LSE: HSBA) posted a marginal gain.

Insurance stocks were mixed. Legal & General (LSE: LGEN) was in the lead with a 2.2% advance, while RSA Insurance Group (LSE: RSA) added 1%. Standard Life (LSE: SL) rose marginally, while Old Mutual (LSE: OML) was flat and Prudential (LSE: PRU) and car insurer Admiral Group (SLE: ADM) shed about 1%. Aviva (LSE: AV) declined marginally.

Private equity group 3i (LSE: III) moved down almost 4%.

Small Cap Movers

Other notable movers among the small caps included African Diamonds (LSE: AFD) with a 7.8% gain.

Large and Mid Cap News

BT Group (LSE: BT.A) upgraded its full year outlook this morning as it reported first half results which came in at the upper end of expectations. The group’s cost reduction program has driven earnings higher while H1 revenue declines proved lighter than the company’s full year guidance.

In its interim management statement the engineering services group AMEC PLC (LSE: AMEC) said it has been trading in line with expectations during FY2009. According to AMEC it "remains on track to deliver another year of improved performance".

Eurasian Natural Resources Corporation PLC (LSE: ENRC) released its production report for the third quarter ended  September 30, revealing a return to production levels last seen before the financial crisis. At the end of the period the company’s primary Kazakhstan based operations were reaching capacity.

Small Cap News

Specialty antimicrobial research and development company Syntopix (AIM: SYN) took another step closer to commercialising a new product targeting a large consumer healthcare market, reporting good results from the trials of its new compound for the treatment of acneic skin, a condition that affects 85% of the population during their lifetime.

Xtract Energy PLC (AIM: XTR) said its 36.8 percent-held affiliate Elko Energy Inc announced that the evaluation of seismic data over the 02/05 licence in the Danish North Sea has identified a Chalk channel with the potential to hold a considerable volume of hydrocarbons, which in a moderate case scenario could be 375 million barrels of recoverable oil.

Developer of CAD and image analysis software Medicsight (AIM: MDST) reported higher revenues and lower operating losses for the third quarter, while making progress with securing the necessary regulatory approvals to commercialize its products in the US and Japan.

Obtala Resources (AIM: OBT) has almost doubled its shareholding in Central China Goldfields PLC (AIM: GGG) since the beginning of October. Today Central China Goldfields said it was notified that Obtala has further increased the number of company shares it controls to 26.5 million from 21.9 million, thus raising its stake to 14.45 percent from 11.94 percent.

London Mining (AIM: LOND), whose shares were admitted to trading on the Alternative Investment Market of the London Stock Exchange last week, updated the market on its progress in key operational areas in the third quarter today.

Emerging copper producer Finders Resources (AIM, ASX: FND)  has released the results of the Wetar Copper Project definitive feasibility study, indicating an economically robust project with a mine life of about nine years.

South America focused explorer Mariana Resources (AIM: MARL) had launched a joint venture with FTSE 250 silver miner Hochschild Mining (LSE: HOC) to jointly explore and develop the companies’ three gold and silver license areas in southern Argentina.

African focused nickel and gold exploration and development junior Nyota Minerals (AIM & ASX: NYO) has identified two new targets at its Tulu Kapi gold project in Ethiopia, expecting to generate more targets and substantially extend the existing 690,000 oz resource as exploration progresses.

At the company's AGM today, Starpharma Holdings (ASX: SPL; OTCQX: SPHRY) chairman Peter Bartels updated investors on the year that was. He was understandably upbeat on Starpharma's prospects, underpinned by a A$7.1 million capital raising, 43% higher revenues, a fall in cash burn to A$2.9m, positive cash flow of US subsidiary DNT and the commercial advancement of the dendrimer platform technology.

Aurelian Oil & Gas PLC (AIM: AUL) announced that Frank Jackson, its former commercial director, is resigning all his positions in the Aurelian group and will be leaving with effect from 30 November 2009.

North America focused explorer Nighthawk Energy (AIM: HAWK) is completing two vertical wells as producers at the Jolly Ranch project in Colorado after both hit hydrocarbon reserves, with two new rigs added to the site to accelerate completion of previously drilled wells and increase production.

Specialty pharma company Sinclair Pharma (AIM: SPH) has announced the termination of its US distribution agreement for Decapinol mouth rinse with Orapharma Inc, allowing it to re-position the product for a larger market, particularly the over-the-counter (OTC) market in the US.

Home credit and motor finance lender S&U PLC (LSE: SUS) announced the acquisition of J&C Smith, a Teesside based home credit company.

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