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Severn Trent, United Utilities and Scottish & Southern Energy climb as FTSE 100 tumbles

26th Nov 2009, 1:04 pm Severn Trent, United Utilities and Scottish & Southern Energy climb as FTSE 100 tumbles

Overview: trading on the London Stock Exchange was halted in midmorning due to what was explained as technical difficulties with all orders getting placed into an auction call period.

The FTSE 100 lost 99 points or nearly 2% before trading was shut down, dragged down by losses in the mining and energy sector, which were responding to declines in oil and metal prices.

Just four FTSE 100 constituents managed to stay above the opening level with defensive stocks Severn Trent (LSE: SVT) and United Utilities (LSE: UU) leading the way with gains of 3.7% and 1.5% respectively. Scottish & Southern Energy (LSE: SSE) posted a marginal gain, as did car insurer Admiral Group (LSE: ADM).

Financial stocks were the heaviest fallers in the market with insurer Legal and General (LSE: LGEN) and HSBC (LSE: HSBA) sinking to the bottom of the index with losses of over 4%. London Stock Exchange Group (LSE: LSE), Barclays (LSE: BARC), Standard Chartered (LSE: STAN), Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) also moved down 4%. Hospitality company Whitbread (LSE: WTB) was down 3.5%.

Miners and oil & gas sector were in decline with Kazakhmys (LSE: KAZ) and Antofagasta (LSE: ANTO) leading the retreat with losses of 4%.

The US stock market is closed today due to Thanksgiving Day.

Commodities

Oil prices climbed this morning as January Brent Crude rose to US$78.23/barrel, while US light, sweet crude reached US$77.34/barrel.

Major oil and gas stocks were in decline. BG Group (LSE: BG) was the heaviest faller with a 2% loss. Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) followed with declines of 1.5%, while Cairn Energy (LSE: CNE) shed 1%, as did supermajors BP (LSE: BP) and Shell (LSE: RDSB).

Midcaps also slid with Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) sliding 2% and 1% respectively, while Dragon Oil (LSE: DGO) declined marginally.

North America focused oil & gas junior Pantheon Resources (AIM: PANR) was the top performer in the sector, rallying 13.5%. Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) followed with gains of 4% and 2.5% respectively.

Kazakhstan operating Max Petroleum (LSE: MXP) and energy investor Xtract Energy PLC (AIM: XTR) headed in the opposite direction, shedding 6% and 5% respectively. Europe focused oil and gas developer Ascent Resources (AIM: AST) and Irish oil and gas exploration company Petroceltic International (AIM: PCI) both lost more than 3%.

Gold and silver slide to weaken miners

Precious metals slid from this morning’s highs with gold moving down to US$1,185/oz, silver slipping to US$18.54/oz and platinum retreating to US$1,453/oz.

Major mining stocks were in decline following the decrease in metal prices. Silver producer Fresnillo (LSE: FRES) and platinum miner Lonmin (LSE: LMI) lost about 3%, while gold miner Randgold Resources (LSE: RRS) shed 1.2%.

Another FTSE 100 constituent, specialty chemicals firm Johnson Matthey (LSE: JMAT) lost 3.5%.

In the FTSE 250, gold miner Petropavlovsk (LSE: POG) and silver producer Hochschild Mining (LSE: HOC) retreated 3%, while Aquarius Platinum (LSE: AQP) declined marginally.

South American based explorer Mariana Resources (AIM: MARL) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) led the juniors, advancing 5.5%.

Most other small caps were in decline. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) slipped 7%, while Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) slid 5% and 4% respectively.

Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) also was in decline, shedding 3%.

Copper and nickel retreat

Base metals also weakened with copper and nickel sliding to US$3.12/lb and US$7.56/lb respectively, while zinc declined to US$1.01/lb.

Base metals focused stocks turned negative. Antofagasta (LSE: ANTO) and Kazakhmys (LSE: KAZ) sank to the bottom of the pile with losses of 4%. Xstrata (LSE: XTA) slid 3.5%, while Anglo American (LSE: AAL), Eurasian Natural Resources (LSE: ENRC), Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) moved down 3%.

BHP Billiton (LSE: BLT) lost 2%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, sliding 2.3%.

Most juniors followed the trend with rare exceptions including South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR), which tacked on more than 3%.
Laterite nickel specialist European Nickel (AIM: ENK) was among the biggest fallers in the sector with a 6% loss.
Banks, insurance, private equity

Financial stocks were in selling mode today. HSBC (LSE: HSBA) and Royal Bank of Scotland (LSE: RBS) were the heaviest fallers in the banking sector, shedding more than 4%. Barclays (LSE: BARC), Lloyds (LSE: LLOY) and Standard Chartered (LSE: STAN) followed with losses of over 3.5%.

Admiral Group (LSE: ADM) was the top performer among the insurance, posting a small gain. Legal & General (LSE: LGEN) was at the bottom of the pile with a 4.5% slide. Aviva (LSE: AV) was down 3.5% and Old Mutual (LSE: OML) declined 3%. Standard Life (LSE: SL) and RSA Insurance Group (LSE: RSA) lost about 2%, while Prudential (LSE: PRU) retreated 1.5%.

Private equity group 3i (LSE: III) was down 2%.

Small Cap Movers

Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS), which surged 10%, and African focussed soft commodity specialist, Agriterra Limited (AIM: AGTA), which slid 4.5%. UK based electrical components producer and supplier Cinpart (AIM: CINP) tumbled 14%, while drug discovery and development group Immupharma (AIM: IMM) was down 9.3%.

Large and Mid Cap News

Heritage Oil Plc (LSE: HOIL) announced it has started drilling the Miran West-2 appraisal well in Kurdistan. The well is the first to be drilled in a multi-well exploration and appraisal drilling programme on the Miran Block.

European electrical retailer DSG International (LSE: DSGI) revealed narrowing losses in its half yearly report for the 24 weeks to the 17 October. Underlying group sales fell 1% to £3.33 billion, and pretax loss narrowed to £23.1 million compared to a £55.6 million loss in the same period last year. Chief executive John Browett said the ‘turnaround is on track’ and the company is well positioned ahead of the peak Christmas trading season.

In their final results for the year ended 26 September, Mitchells & Butlers (LSE: MAB) said it has produced a robust operational performance. Over the full year, the group achieved like-for-like sales growth of 1.6% and total revenues increased 2.6%. Food and drink sales achieved like-for-like growth of 3.1% and 1.8% respectively. Mitchells and Butler shares climbed almost 2% following the results.

Small Cap News

West China Cement (AIM: WCC) expects its Ankang plant to operate with a higher profit margin after equipping it with a limestone conveyor belt, the completion of which was announced today.

Producer of agricultural commodities Landkom International (AIM: LKI) has raised £9.75 million through a placing, securing enough cash to fund spring planting and carry it through to harvest in 2010, while full year losses are expected to be in line after the group stabilised its overhead spending at about US$450,000 per month.

Specialist pensions consultancy Mattioli Woods (AIM: MTW) said the business performed even though investment markets were still “far from normal,” and the full year results were expected to be in line with board’s expectations.

Falkland Oil & Gas Limited (AIM: FOGL) has announced a placing of 43.5 million shares to raise £50 million to fund its share of the planned drilling programme in the East Falklands Basin and help the company meet its working capital requirements through to the end of 2011.

Horizonte Minerals PLC (AIM: HZM) said the latest metallurgical results from the laterite nickel discovery at its Lontra project in northern Brazil indicate suitability for a low cost heap leach process and significant nickel and cobalt recoveries with low acid consumption.  Nickel recovery averaged 92 percent and cobalt 82 percent in the transition and silicate zones of the deposit.

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