HSBC, Scottish & Southern and Imperial Tobacco fall, but FTSE 100 climbs as commodities rise
Overview: the FTSE added just 0.1%, failing to fully recover from Thursday’s decline as today’s US economic data was mixed. US retail sales turned out to be better than expected, showing a 0.3% improvement in February, however, the University of Michigan consumer sentiment index dropped from 73.6 to 72.5 during the month.
Royal Bank of Scotland (LSE: RBS) led the blue chips with a 5% advance, while base metal miner Eurasian Natural Resources (LSE: ENRC) and satellite telecommunications company Inmarsat (LSE: ISAT) followed with gains of 4.5% and 4% respectively. Other notable risers included broadcaster BSkyB (LSE: BSY) and tour operator Thomas Cook (LSE: TCG), which were up 4% and 3%, as well as airline British Airways (LSE: BAY), hedge fund manager Man Group (LSE: EMG) and plumbing and heating materials manufacturer Wolseley (LSE: WOS), which all tacked on 2.8%.
Just five FTSE 100 constituents lost more than 1%. Bank HSBC (LSE: HSBA) was down 1.6%, while insurance focused investor Resolution (LSE: RSL), insurer Standard Life (LSE: SL), Imperial Tobacco Group (LSE: IMT) and Scottish & Southern Energy (LSE: SSE) all lost slightly more than 1%.
In the US, the Dow Jones Industrial Average started flat, the broader S&P 500 index was down 0.15% and the technology heavy NASDAQ composite lost 0.25%.
Commodities
Crude advanced today, nearly reaching US$83/barrel after recent demand growth projection from OPEC (Organisation of Petroleum Exporting Countries) was supported by international energy watchdog International Energy Agency (IEA), which today said it expected global oil demand to rise by 1.6 mmbbls/d to 86.6 mmbbls/d this year. The IEA also revised its global demand estimate for 2009 to 85 mmbbls/d.
Meanwhile, Goldman Sachs (NYSE: GS) said that higher oil demand could drive the prices to US$92-97/barrel within the next three to six months.
Oil also benefitted from this week’s inventory update from the US Energy Information Administration (EIA), which reported a surprisingly low increase of 1.4 mmbbls (million barrels) in oil inventories a day after API (American Petroleum Institute) said crude stockpiles in the US added 6.5 million barrels, while a smaller increase was expected.
Oil got further support in late afternoon after the US Commerce Department said that retail sales unexpectedly increased 0.3% in February, while a decline was expected, improving the outlook for crude demand.
Brent Crude for May advanced to US%81.57/barrel, while US light, sweet crude climbed to US$82.79/barrel.
Shell (LSE: RDSB) gained 1%, while fellow supermajor BP (LSE: BP) posted a small loss. BG Group (LSE: BG) and Tullow Oil (LSE: TLW) rose marginally, while Cairn Energy (LSE: CNE) outperformed fellow blue chips, advancing 1.3%.
Oil and gas engineering firms Petrofac (LSE: PFC) and Amec (LSE: AMEC) added 2% and 1.2% respectively.
Salamander Energy (LSE: SMDR) led the midcaps with a 3.5% gain. JKX Oil & Gas (LSE: JKX) rose 2.8%, while Soco International (LSE: SIA) was up 1.5%. Dana Petroleum (LSE: DNX) and Melrose Resources (LSE: MRS) posted marginal gains and Heritage Oil (LSE: HOIL) tacked on nearly 1%. Dragon Oil (LSE: DGO) was flat and Premier Oil (LSE: PMO) lost just less than 1%.
Services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) added 1.6% and 1%.
Mongolia-focused Petro Matad Ltd (AIM: MATD) led the juniors with a 7% advance. Africa focused energy company Dominion Petroleum (AIM: DPL) and North America focused oil & gas junior Pantheon Resources (AIM: PANR) advanced 4.3%.
Miners climb as gold and silver rise
Gold prices improved today after the US dollar showed weakness ahead of key economic data, including the University of Michigan consumer sentiment index and US retail sales update.
Gold is seen as a riskier alternative to the safe-haven US dollar and usually moves inversely to the greenback.
The American currency rose this week amid uncertainly in global stock markets and due to weakness in the euro, which was under pressure from renewed worries over the Greek debt crisis and Fitch’s comments on another European debt laden country Portugal early in the week. The rating agency said it would cut Portugal’s AA rating if the ongoing fiscal consolidation keeps progressing at a slow pace. Jitters eased on Wednesday, when Portugal conducted a successful bond issue to raise US$1.34 billion to improve the outlook for its debt situation.
Gold was under pressure from yesterday’s update from China, whose consumer price index increased to an annualised rate of 2.7% in February to spark speculation about further monetary policy tightening in the country.
The yellow metal climbed to US$1,115/oz, while silver and platinum advanced to US$17.28/oz and US$1,620/oz respectively.
Blue chip mining stocks were on the rise today. Silver and gold producer Fresnillo (SLE: FRES) climbed 1.6% to take the lead, while platinum miner Lonmin (LSE: LMI) added 1.4% and Randgold Resources (LSE: RRS) was up 1.4%.
Specialty chemicals firm Johnson Matthey (LSE JMAT) advanced 1.8%.
Midcaps were mixed as while Aquarius Platinum (LSE: AQP) and gold producer Petropavlovsk (LSE: POG) gained 1.2% and 2.3% respectively, silver producer Hochschild Mining (LSE: HOC) posted a small loss.
Africa focused gold miner Pan African Resources (AIM: PAF) led the juniors with a 7% rally. Western Australia operating Norseman Gold (AIM: NGL) and Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) followed with gains of nearly 4%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) slipped 7.5%.
Miners advance as nickel rallies, copper steady
Base metals were mixed. Copper held steady at US$3.36/lb, while nickel rallied to US$9.80/lb and zinc declined to US$1.05/lb.
All major miners posted gains with the exception of BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA), which were flat.
Eurasian Natural Resources (LSE: ENRC) was in the lead with a 4% gain, while Vedata Resources (LSE: VED) followed, climbing 1.6%. Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL) moved up 1.5% and 1% respectively, while Antofagasta (LSE: ANTO) rose marginally.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) climbed 1.6%.
Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and iron ore focused investor Red Rock Resources (AIM: RRR) were the top performers among the juniors, rallying 8.5% and 7% respectively. Australia focused coking coal producer Caledon Resources (AIM: CDN) also did well, tacking on 4%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) headed in the opposite direction, shedding more than 6%.
Banks, insurance, private equity
Banking stocks were in demand today with the exception of HSBC (LSE: HSBA), which slid 1.4%.
Part-nationalised Royal Bank of Scotland (LSE: RBS) and Lloyds (LSE: LLOY) were the top performers with gains of 4.9% and 3.2%. Barclays (LSE: BARC) added 2.2% and Standard Chartered (LSE: STAN) rose marginally.
Old Mutual (LSE: OML) and Legal & General (LSE: LGEN) led the pack with gains of 2% and 1.6% respectively. RSA Insurance Group (LSE: RSA) added 1.1%, while Aviva (LSE: AV) and Prudential (LSE: PRU) rose marginally.
Admiral Group (LSE: ADM) posted a small loss, while Standard Life (LSE: SL) slid 1.5%.
Private equity group 3i (LSE: III) added 1.3%.
Small Cap Movers
Other notable movers among the small caps included vision based human machine interfaces focused technology company Seeing Machines (LSE: SEE) and mobile email and data synchronisation group Synchronica PLC (AIM: SYNC), which rallied 16% and 10.5% respectively.
Large Cap News
Dragon Oil (LSE: DGO) has completed the initial testing of two Dzheitune development wells, A/142 and 13/143, at its Cheleken operation in the Caspian Sea. The wells were drilled to 3,961m and 3,450m, and tested at combined rates of 2,103 barrels of oil per day (bopd) and 2,168bopd respectively.
Mobile operator Vodafone’s (LSE: VOD) communication managing business Vodafone Global Enterprise (VGE) has secured a five-year contract to provide Germany's logistics group Deutsche Post DHL (FSE: DPW) (DPDHL) with a fully managed MPLS network in 67 countries.
Small Cap News
African-focused Discovery Metals (ASX/BSE: DML; AIM: DME) has reported that latest drill results highlight continuation of Plutus‐Petra mineralisation for 15 km beyond the current 11 km strike length boundary of the existing mineral resources.
In its first-half results, the Syntopix Group (AIM: SYN) said it is making progress as it continues to attract a number of commercial opportunities following last year’s completion of a Phase II clinical study and its evaluation agreement with a major consumer healthcare company. The company recently appointed a new chairman, and it is finalising plans for a proposed fundraising which will enable the company to progress these opportunities.
Kalahari Minerals’ (AIM: KAH) said it is highly encouraged by the news that its 40.41% owned associate Extract Resources (ASX, TSX: EXT) is on track with its Definitive Feasibility Study (DFS) for the world-class Rossing South deposit at the Husab uranium project in Namibia.
African focused investment company Lonrho (AIM: LONR) has been promoted into the FTSE AIM UK 50 Index and the FTSE AIM 100 Index, effective from the 22 March 2010. The company’s inclusion into the key indices reflects Lonrho’s growth and its position in London’s junior market, then group said in a statement.
Specialty chemicals producer Yule Catto & Co PLC (YULC) announced that its joint venture subsidiary Revertex (Malaysia) Sdn Bhd has exchanged conditional contracts with HB Fuller Co for the sale of Revertex Finewaters Sdn Bhd, and Yule Catto will use the money to reduce debt.
Firestone Diamonds (AIM: FDI) has been selected by De Beers’ joint venture with the Namibian government, Namdeb Diamond Corporation, as the preferred supplier and operator for the Dredge and Floating Treatment Plant (FTP) project at Namdeb's diamond mining operations in Namibia.
Planet Payment (LSE: PPT and PPTR; OTC: PLPM) has completed and received certification from TSYS Acquiring Solutions (TSYS), a wholly-owned subsidiary of TSYS (NYSE: TSS), for the company’s iPAY payment gateway on the TSYS processing platform. TSYS currently offers a Planet Payment powered Multi-Currency Pricing service which allows merchants to reach international markets through price localization. Multi-Currency Pricing allows international customers to view prices, and pay for goods/services in their domestic currencies.
Daniel Stewart & Company (DS&C) issued a note on Planet Payment (LSE: PPT and PPTR; OTC: PLPM) today, reiterating its 'buy' rating after the data and payment processor received certification from its core existing client TSYS (NYSE: TSS).
Liberty PLC (LSE:LBE) jumped 7% in early deals this morning after the London retailer confirmed that it had received several approaches “that may or may not lead to an offer” for the company MWB Group (LSE:MWB) owns 68% of the equity in Liberty.
Specialist provider of lease asset finance to the SME sector 1pm PLC (AIM: OPM) has raised £1.15 million via a placing to help the company grow its lease portfolio further and enhance receivables and cash generation.
Henderson Morley (AIM: HML) (HML) and KMS Therapeutics have commenced a 9 week due-diligence period ahead of a potential license agreement. Following an earlier agreement on 19 February, the companies have signed a further letter of intent (LOI) in respect of the intellectual property rights of HML’s ionic contra-viral therapy (‘ICVT’) human portfolio.
Emissions trading exchange owner and operator Climate Exchange (AIM: CLE) reported a better than expected 2.4x increase in pre-tax profits to £6.8 million in the full year 2009 as revenues from core businesses soared 48% to £33.6 million. In the year to end-December 2009 two of its three operated exchanges posted better performance with improved volumes and membership figures.
