FTSE 100 extends gains as commodities rally, Dow Jones, S&P 500 and NASDAQ advance
Overview: the FTSE 100 extended gains today, climbing 1% as financial stocks performed strongly, led by Barclays (LSE: BARC) and part-nationalised banks RBS (LSE: RBS) and Lloyds (LSE: LLOY). UK inflation data that came out earlier today revealed a 3.5% annualized growth in January, up from 2.9% in December.
In other news, the New York Federal Reserve Bank said that its Empire State manufacturing index rose to 24.9 in February from 15.9 in January, signalling a higher level of manufacturing activity in New York state.
Financial stocks were in demand today with banks Barclays (LSE: BARC) and RBS (LSE: RBS) making it to the top of the leaderboard with gains of 6.4% and 4.6% respectively. Other notable risers included hedge fund manager Man Group (LSE: EMG) with a 3.5% advance and miners Vedanta Resources (LSE: VED) and Anglo American (LSE: AAL), which tacked on 4% and 3% respectively.
InterContinental Hotels (LSE: IHG) was the heaviest faller among the blue chips, sliding 3.3% on a disappointing set of full year results. Imperial Tobacco Group (LSE: IMT) and tour company Thomas Cook (LSE: TCG) followed, shedding more than 1.5%. Quality and safety services company Intertek (LSE: ITRK), British American Tobacco (LSE: BATS), airline British Airways (LSE: BAY) and telecom group BT (LSE: BT.A) tacked on slightly more than 1%.
US stocks were off to a good start after taking a day off on Monday due to the President’s Day holiday. The Dow Jones Industrial Average advanced 0.9%, the broader S&P 500 index climbed 1%, while the technology heavy NASDAQ composite added 0.8%.
Commodities
Oil prices climbed today as the US Dollar weakened against the euro as concerns over the debt crisis in Greece eased, propping up Europe’s single currency, which has been under pressure for the past few weeks. A weaker US Dollar makes dollar-denominated commodities cheaper for holders of other currencies, driving up the demand.
In other news, Chief Economist at BP (LSE: BP) Christof Ruehl told Reuters that oil prices would likely stay in the current range for the remainder of the year at an industry event in London today, while downplaying the impact of China’s recent moves to tighten monetary policy and expressing doubts that Saudi Arabia-led oil cartel OPEC (Organization of Petroleum Exporting Countries) will be able to abide by the self-imposed production quotas.
April Brent Crude rallied to US$75.07/barrel, while US light, sweet crude reached US$76.30/barrel on the New York Mercantile Exchange.
Yesterday, crude prices were pressured by an update from China, which raised the reserve requirement for banks by half a percentage point in its most recent step to cool down the ongoing growth and prevent the economy from overheating and tightening lending restrictions for banks last month.
Blue chip oil and gas producers posted small gains today. Cairn Energy (LSE: CNE) was the top performer, climbing 1.2%. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) added less than 1%, as did other FTSE 100 constituents BG Group (LSE: BG) and Tullow Oil (LSE: TLW).
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) advanced 2% and 1.2% respectively.
Midcaps were mixed. Dana Petroleum (LSE: DNX) was in the lead with a 2% improvement. Soco International (LSE: SIA) moved up 1.5%, while fellow FTSE 250 producers Heritage Oil (SLE: HOIL) and Melrose Resources (LSE: MRS) rose marginally. Premier Oil (LSE: PMO) and Salamander Energy (LSE: SMDR) were flat, while JKX Oil and Gas (LSE: JKX) posted a small loss and Dragon Oil (LSE: DGO) slid 1.3%.
Services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) tacked on less than 1%.
Most juniors were in decline today. Iraq operating Irish oil company Petrel Resources (AIM: PET), Mongolia-focused Petro Matad Ltd (AIM: MATD) and Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) slid 5.5%, 4% and 3% respectively.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) both added 3%.
Gold, silver and platinum climb
The lack of a resolution to the European debt crisis has increased the appeal of precious metals as a safe haven for investors, triggering additional demand for gold and putting it back above US$1,100 after the yellow metal fell below US$1,050/oz last week.
Today, spot prices for gold stood at US$1,113/oz, while silver and platinum improved to US$15.77/oz and US$1,529/lb respectively.
Mining stocks were on the rise today. Gold miner Randgold Resources (LSE: RRS) and silver producer Fresnillo (LSE: FRES) gained 2.2%, while fellow FTSE 100 constituent platinum miner Lonmin (LSE: LMI) added 1.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Gold miner Petropavlovsk (LSE: POG) led the sector in the FTSE 250 with a 4.6% rally. Fellow midcaps Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) followed with gains of 3%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) led the juniors, rallying 14% on no news. South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) followed with a 6.6% climb, Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) was up 5%, while commodity asset development company Mercator Gold (AIM: MCR) rose 4.5%.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML), which today said it was in merger discussions with Coville Intercorp, also rose 4%.
Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) was in decline, sliding 3.5%.
Base metals rise to boost miners
Base metals also showed improvement today with copper and nickel advancing to US$3.15/lb and US$8.90/lb, while zinc reached US$1.02/lb.
Mining stocks were in demand as metals prices increased. Vedanta Resources (LSE: VED) led the way with a gain of nearly 4%. Anglo American (LSE: AAL) and Eurasian Natural Resources (LSE: ENRC) both added 2.8% and Antofagasta (LSE: ANTO), BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) added slightly more than 2%.
Rio Tinto (LSE: RIO) climbed 1.7% and Kazakhmys (LSE: KAZ) rose 1.2%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) against was the top performer in the sector, rallying 11% to reach 267 pence less than a week after standing below 200 pence.
Indonesia operating coal miner Churchill Mining (AIM: CHL) and copper and gold miner EMED Mining (AIM: EMED) led the juniors, climbing 5% and 4% respectively. Most other small cap miners were in the red.
Zinc miner Connemara Mining (AIM: CON) and cement operator Prosperity Mineral Holdings (AIM: PMHL) shed 5.5% and 5% respectively, while zinc mining and recycling specialist ZincOX (AIM: ZOX) declined 4% and iron ore focused investor Red Rock Resources (AIM: RRR) dropped 3%.
Copper and nickel explorer Regency Mines (AIM: RGM) was down 7.5%.
Banks, insurance, private equity
Barclays (LSE: BARC) led the banking sector, adding 6.5% after reporting on its full year results. Royal Bank of Scotland (LSE: RBS) and fellow part-nationalized bank Lloyds (LSE: LLOY) climbed 4.5% and 4% respectively, while sector peers Standard Chartered (LSE: STAN) and HSBC (LSE: HSBA) added 1.5% and 1.2% respectively.
Legal & General (LSE: LGEN) led the insurers, advancing 3.5%. Old Mutual (LSE: OML) followed with a 2% gain, while Admiral Group (LSE: ADM) and Prudential (LSE: PRU) added 1.4%. Aviva (LSE: AV) tacked on 1%, RSA Insurance Group (LSE: RSA) rose marginally and Standard Life (LSE: SL) stayed at the opening level.
Private equity group 3i (LSE: III) was flat.
Small Cap Movers
Other notable movers among the small caps included Africa focused investor Lonrho (LSE: LONR), which added 6.4%, and Seeing Machines (LSE: SEE), also with a gain of over 6%.
Large and Mid Cap News
FTSE 100 mining giant, Anglo American (LSE: AAL) has sold off its construction aggregates and concrete products businesses in Europe for approximately US$400 million.
Infrastructure software developer, Autonomy Corporation’s (LSE: AU.) meanings-based computing platform, IDOL, has been selected by the Civil Aviation Administration of China (CAAC) to manage and access more than 10 million documents in its digital library. Autonomy will integrate the sources within the CAAC library, which forms a part of the Chinese Ministry-owned National Library, to provide users with fast and accurate access to the information.
FTSE 250 food group Premier Foods (LSE: PFD) reported much improved full year results for the 12 month period ended 31 December 2009 this morning. The owner and manufacturer of several high profile branded foods, including Hovis Bread, Bisto and Branston, enjoyed a 6.5% increase in branded sales to £1.678 million as its market share gained “across all our markets”.
British bank, Barclays (LSE:BARC) reported record income for the 12 month period ended 31 December 2009 of £30.986 billion, up 34% on the previous year as it continued to reap the benefit of being one of the few banks to avoid financial support from the government during the credit crunch.
Domino’s Pizza (LSE: DOM), the owner, operator and franchiser of Domino’s Pizza restaurants in the United Kingdom and Ireland, reported yet another set of solid results this morning.
InterContinental Hotels Group (LSE: IHG) swung to full year losses as revenues declined 19% to US$1.53 billion as a result of a 14.7% decrease in RevPAR (revenue per available room) due to lower levels of occupancy amid the economic downturn.
Oil and gas services company Wood Group (LSE: WG) has secured an 18 year contract from PERU LNG worth US$150 million to provide service and maintenance program to maximize machine availability of the gas turbines, compressors and generators at PERU’s Pampa Melchorita LNG (liquefied natural gas) site south of Lima.
Paper and packaging manufacturer and FTSE 250 constituent Mondi Group (LSE: MNDI) has confirmed that its operating profit for the second half will be above that of the first half but below the comparable period of 2008.
AstraZeneca (LSE: AZN) and Rigel Pharmaceuticals (NASDAQ: RIGL) have signed an exclusive worldwide license agreement for the development and commercialisation of Rigel's late-stage investigational product for rheumatoid arthritis (RA), fostamatinib disodium (R788). AstraZeneca will pay Rigel US$100 million upfront, with up to an additional US$345 million payable subject to development, regulatory and first sale milestones.
StepStone Solutions (LSE: STPS, OSAKA: STP) has begun the implementation of a new e-recruitment management platform for AXA-Minmetals Assurance. The new system will support the insurance group’s rapid business development, and help it succeed in the increasingly competitive financial job market in China's rapidly expanding economy, StepStone said.
Small Cap News
Multi-currency data processing specialist, Planet Payment (AIM: PPT, PPTR; OTC: PLPM) has been awarded a US Patent for its Time-of-Transaction Foreign Currency Conversion process. The patent describes Planet Payment's unique exchange rate calculation methodology across its Dynamic Currency Conversion product suite.
Synchronica (AIM: SYNC) has unveiled its next-generation messaging system, Mobile Gateway 5 - a complete mobile messaging suite available to all consumers and business users regardless of which handset they use. February is proving a busy month for Synchronica, as this latest product launch follows the roll-out of its low-cost MessagePhone product which uses the Mobile Gateway technology.
Hargreaves Services (AIM: HSP) reported increases in earnings and profits for the first half despite an almost 30% decline in revenues due to sharp falls in commodity prices, saying it was on track to meet market expectations for the full year.
EMED Mining (AIM: EMED) reported this morning that is flagship project, the Rio Tinto Copper Mine in Spain, is gaining momentum in securing all the relevant approvals to restart operations at the historic mine.
Solomon Gold (AIM: SOLG) expects to start its airborne Electromagnetic (EM) Survey at the Fauro Island project on the 18th February 2010. The survey will cover 800 line-kilometres, and an area of 75 square kilometres. The EM Survey has been specifically designed to identify resistors indicating highly silicified bodies, which are believed to be gold bearing.
African Copper (AIM: ACU) started posting revenues in final quarter of 2009, raking in £2.63 million from its first sale of copper concentrate, while losses declined from £56.9 million in Q4 2008 to £3.72 million as impairment losses recognized on Mowana Mine in 2008 were reversed.
Churchill Mining (AIM: CHL) has been notified that Advaita Partners managed Indo Setubara Limited has purchased a further 0.5 million shares in the company to increase its shareholding to 7.61% a little over a year after acquiring an initial 6.6% interest in the company.
Frontier Mining (AIM: FML) said that it is in early-stage discussions with Coville Intercorp to merge Coville’s assets into Frontier with a memorandum of understanding (MoU) already signed and the transaction expected to be concluded by 31 October 2010.
Semiconductor manufacturer CML Microsystems (AIM: CML) said sales in the period from 1 October have improved over those reported for the first half, prompting the company to maintain a public listing after taking advice regarding its listed status.
