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FTSE 100 rally cools off as US home sales drop 11% in November, miners climb as metals rise

23rd Dec 2009, 4:02 pm FTSE 100 rally cools off as US home sales drop 11% in November, miners climb as metals rise

Overview: the FTSE 100 had its gains trimmed to 0.5% late in the afternoon after a negative start on Wall Street following the new home sales update from the Commerce Department, which revealed an unexpected 11% decline in November to hit the lowest level since April. Yesterday the National Association of retailers said that existing home sales climbed 7.4% in November after improving 10% in October.

The Dow Jones Industrial Average was down 0.2%, while the broader S&P 500 index slid 0.1%. However the NASDAQ composite managed to stay above the opening level with a gain of 0.3%.

Miners did well today as metal prices rose. Eurasian Natural Resources (LSE: ENRC) emerged atop the leaderboard with a 3% climb, while British American Tobacco (LSE: BATS) and gold producer Randgold Resources (LSE: RRS) followed with gains of over 2.5%. Other notable risers included investment company Alliance Trust (LSE: ATST) and bank Standard Chartered (LSE: STAN) with gains of 1.7$ and 2.3%.

Oil and gas company Cairn Energy (LSE: CNE) was the heaviest faller in the index with a loss of over 4%. Telecom group BT (LSE: BT), which was trading ex-dividend today, slid 4%. Other notable fallers included commercial property company Liberty International (LSE: LII) with a 2.3% loss, utility companies Severn Trent (LSE: SVT) and United Utilities (LSE: UU) with declines of 1.5% and 2%, power generation company International Power (LSE: IPR), which also shed 1.5%, and security services group G4S (LSE: GFS), which shed slightly more than 1%.

Commodities

Oil prices rose today as February Brent Crude climbed to US$74.17/barrel, while US light, sweet crude reached US$75.32/barrel.

Oil and gas stocks mostly rose today. BG Group (LSE: BG) climbed 1.3% to take the lead in the sector in the FTSE 100. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) added 1%, as did Petrofac (LSE: PFC). Tullow Oil (LSE: TLW) declined marginally, while Cairn Energy (LSE: CNE) sank to the bottom of the pile with a 3% loss.

Midcaps fell into about the same pattern as while Dragon Oil (LSE: DGO) rose marginally, Dana Petroleum (LSE: DNX) and Heritage Oil (LSE: HOIL) added 1.3% and 1.6% and Melrose Resources (LSE: MRS) slid 2.7%.

North America focused oil & gas junior Pantheon Resources (AIM: PANR) and Europe focused oil and gas developer Ascent Resources (AIM: AST) led the small caps with gains of 9% and 7.5% respectively. Mongolia-focused Petro Matad Ltd (AIM: MATD) followed with a 3% climb.

Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) headed in the opposite direction, shedding 4%.

Gold, silver and platinum rise

Precious metals advanced today as gold rose to US$1,085/oz, while silver and platinum reached US$17.05/oz and US$1,397/oz.

Major mining stocks were mixed. Silver miner Fresnillo (LSE FRES) declined marginally, while gold producer Randgold Resources (LSE: RRS) and platinum miner Lonmin (LSE: LMI) added 1.7% and 2.2%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.

In the FTSE 250, Aquarius Platinum (LSE: AQP) was in the lead with a 3% climb, while silver producer Hochschild Mining (LSE: HOC) added 2% and gold miner Petropavlovsk (LSE: POG) shed 1%.

Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Iran focused gold explorer Persian Gold (AIM: PNG) led the small cap with gains of 12.5% and 12%. South American based explorer Mariana Resources (AIM: MARL) followed with a 9.5% advance.

Commodity asset development company Mercator Gold (AIM: MCR), UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) and African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) headed in the opposite direction, sliding 12%, 9.3% and 5% respectively. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Turkey focused gold miner Ariana Resources (AIM: AAU) were down 4%.

Copper and nickel rise to boost miners

Base metals advanced today. Copper and nickel rose to US$3.13/lb and US$8.14/lb, while zinc improved to US$1.11/lb.

Eurasian Natural Resources (LSE: ENRC) led the base metal focused stocks with a 3.5% gain. Kazakhmys (LSE: KAZ) was up 2.5%, while Rio Tinto (LSE: RIO), Vedanta Resources (LSE: VED) and Xstrata (LSE: XTA) added more than 2%. Antofagasta (LSE: ANTO) was up 2%, while BHP Billiton (LSE: BLT) climbed 1.7% and Anglo American (LSE: AAL) rose 1%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) gained nearly 1%.

Laterite nickel specialist European Nickel (AIM: ENK) led the small caps with a 6% gain, while Botswana operating nickel and copper miner Discovery Metals (AIM: DME) climbed 4%. Mineral sands producer Kenmare Resources (LSE: KMR) was up 3.7%.

Australia focused coking coal producer Caledon Resources (AIM: CDN) declined, shedding 5%.

Banks, insurance, private equity

Financial stocks were mixed today. Standard Chartered (LSE: STAN) led the banking stocks with a 2.2% climb, while HSBC (LSE: HSBA) added 1.3% and Barclays (LSE: BARC) rose marginally.

Royal Bank of Scotland (LSE: RBS) slid 1.7%, while fellow part-nationalised bank Lloyds (LSE: LLOY) made little headway.

Most insurance companies were in decline today. Aviva (LSE: AV) led the retreat with a 1.8% decline, while Admiral Group (LSE: ADM) lost 1% and Old Mutual (LSE: OML) declined marginally.

Legal & General (LSE: LGEN) and Prudential (LSE: PRU) were flat, while RSA Insurance Group (LSE: RSA) went against the tide with a marginal gain.

Private equity group 3i (LSE: III) was flat.

Small Cap Movers

Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP), which added 5% and UK based electrical components producer and supplier Cinpart (AIM: CINP) and environmental science and technology company Accsys Technologies (AIM: AXS), which both rose 6.5%. South Africa operating power producer IPSA Group (AIM: IPSA) climbed 6%.

Large and Mid Cap News

Chloride Group PLC (LSE: CHLD) said it has completed the acquisition of Automatismes Energie Electroniques Systemes SAS, a French secure power company focused on the energy and infrastructure market, from Sofisme SA which is part of the French Socaldi Group.

Dragon Oil PLC (LSE: DGO) said it has awarded a more favourable two-year contract to Naftna Industrija Srbije (NIS) Naftagas for the lease and management of a previously used land rig in the Cheleken contract area in the Caspian Sea offshore Turkmenistan.

Small Cap News

Prosperity Minerals Holdings (AIM: PMHL), which has just sold its Chinese cement business for £300 million, reported higher H1 revenues and profits amid what the company said was a challenging economic environment, now looking to take advantage of the massive cash inflow to develop other businesses in China.

Central China Goldfields PLC (AIM: GGG) said it has terminated its interest in the Dong Mao Huo gold project for no consideration, thus exiting its last project in China, a move it already flagged in the last update released in mid-December.

Jubilee Platinum’s (AIM: JLP/JSE: JBL) said  chief executive Colin Bird bought 185,000 more shares in the company at 26.85 pence each.

Live interactive TV gambling specialist NetPlay TV PLC (AIM: NPT) said that, following a review of the pilot trial, it has terminated the contract in place with Stanley Bet International by mutual agreement.

IPSA (AIM: IPSA) has reached an agreement to sell one of the four turbines it purchased for the delayed Coega project in South Africa to Independent Power Corporation (IPC) to use it in a power plant in Bolivia.

Ceramic Fuel Cells Ltd (AIM/ASX: CFU) said it has installed a BlueGen power and heating unit with VicUrban, the sustainable urban development agency of the government of Australia’s Victoria state.

Finders Resources (AIM: FND) exercised its option to acquire the Whim Creek SX-EW (solvent extraction and electrowinning) plant from a subsidiary of Straits Resources Ltd for A$5 million in shares, giving Straits a 10.06% interest in the company.

Rurelec PLC (AIM: RUR) said its 50.001 percent owned subsidiary Empresa Guaracachi SA, has at the suggestion of the Bolivian government applied to the Electricity Control Authority (the AE) to install a new gas fired power plant with a nominal capacity of 128 MegaWatts on a site at Huaricana in the Department of La Paz which was acquired two years ago by Guaracachi for such a project.

Mariana Resources (AIM: MARL) announced the results from initial drilling programmes at its Buenaventura and Perro Chico iron-oxide-copper-gold (IOCG) projects in the prospective Atacama region in northern Chile, saying they indicated potential for IOCG mineralisation.

Medical and technology business investor Amphion Innovations PLC (AIM: AMP) said it has received a further subscription of £1.1 million for the convertible promissory note first announced in December 2008, bringing the total amount issued to £4.83 million.

London Mining (AIM: LOND) reported on the results of the bankable feasibility study (BFS) for the Wadi Sawawin iron ore project, which it said confirmed that both 5 Mtpa (million tonnes per annum) and 10 Mtpa operations were feasible and identified resources to allow mine extension and further capacity increase.

Broker Jefferies International raised its price target on Aurelian Oil & Gas (AIM: AUL), to 58 pence as the Eastern Europe focused junior’s actual market value of 30 pence per share eclipsed the old target of 21 pence after a competent persons report (CPR) revealed greater exploration potential than previously recognized.

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