Carnival Corp, BAE Systems, InterContinental Hotels, Whitbread and Aggreko rise to bolster FTSE 100
Overview: the FTSE 100 moved in line with pre-trade expectations, rising 0.3% amid a lack of major economic updates in either the US or the UK.
Part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) emerged atop the leaderboard with gains of 10% and 5% respectively. Cruise operator Carnival Corp (LSE: CCL) and defence and aerospace systems manufacturer BAE Systems (LSE: BA) followed with gains of 2.6%, while hospitality group Whitbread (LSE: WTB), temporary power provider Aggreko (LSE: AGK) and InterContinental Hotels Group (LSE: IHG) added 2%.
Energy company Centrica (LSE: CNA) was at the bottom of the pile with a loss of nearly 2%. Other notable fallers included Scottish & Southern Energy (LSE: SSE), power generation company International Power (LSE: IPR), British American Tobacco (LSE: BATS) and National Grid (LSE: NG), which all gained 1.2%.
US stocks opened lower as the Dow Jones Industrial Average lost 0.25%, the broader S&P 500 index declined 0.4% and the technology heavy NASDAQ composite lost 0.6%.
Commodities
Traders were taking their cues from movements in the currency markets as Friday has been quiet in terms of major economic updates. Oil prices declined as the US dollar firmed on a weaker euro, which was under pressure from renewed worries over Greece’s debt situation. The latest development in Greek fiscal crisis came yesterday when Gthe debt laden country said that it was unlikely that it would receive aid from other euro zone countries and that it could turn to the IMF (International Monetary Fund) for help.
Jitters over the persisting debt problem in Greece and other euro zone countries including Portugal were subdued two weeks ago when the country successfully conducted a bond issue to raise €5 billion to meet its near term commitments and introduced a fresh economic austerity package to save some 4.8 billion. According to estimates, Greece is going to need to secure €50 billion this year or face a default.
Today, the German government said it does not rule out IMF aid for Greece.
A stronger American currency makes US dollar-denominated commodities such as crude more expensive for holders of other currencies, curbing demand.
The prices was also hit by an apparently declining crude demand in the US after Wednesday’s inventories update from the EIA (Energy Information Administration) showed an increase of just 1 million barrels in US crude stockpiles for the previous week, while distillates including heating oil and gasoline stocks were down 1.5 million barrels and 1.7 million barrels respectively.
Blue chip oil and gas producers were mixed today. BG Group (LSE: BG) was the top performer with a 1.1% gain. BP (LSE: BP) rose marginally, while fellow supermajor Shell (LSE: RDSB) was flat, as was another FTSE 100 constituent Tullow Oil (LSE: TLW).
Cairn Energy (LSE: CNE) slid to the bottom of the pile, shedding 1.3%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) held steady.
Midcaps performed better as most companies were on the rise. Premier Oil (LSE: PMO) and Dana Petroleum (LSE: DNX) led the way with gains of 2.4%. Melrose Resources (LSE: MRS) moved up 1.5%, while Salamander Energy (LSE: SMDR) added 1.1%. Dragon Oil (LSE: DGO) and Heritage Oil (LSE: HOIL) gained less than 1%.
JKX Oil & Gas (LSE: JKX) and Soco International (LSE: SIA) were flat.
Energy investor Xtract Energy PLC (AIM: XTR) and North Sea explorers Xcite Energy (AIM: XEL) led the juniors, climbing 7.5% and 6% respectively. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) added 4%.
Gold pressured by stronger US dollar
Gold declined today as euro stayed low on renewed Greek debt jitters.
The latest development in the Greek fiscal crisis saga came yesterday when Greece said that it was unlikely that it would receive aid from other euro zone countries and that it could turn to the IMF (International Monetary Fund) for help. The worries over Greece’s debt situation, which has kept Europe’s single currency under pressure for weeks, were subdued two weeks ago when the country successfully conducted a bond issue to raise €5 billion to meet its near term commitments and introduced a fresh economic austerity package to save some 4.8 billion. According to estimates, Greece is going to need to secure €50 billion this year or face a default.
Today, the German government said it did not rule out IMF aid for Greece.
The US dollar climbed on the euro’s weakness today to push down gold and other precious metals. Gold is seen as a riskier alternative to the safe haven US dollar and usually moves inversely to the American currency.
The yellow metal nearly reached US$1,130/oz yesterday after the US dollar declined on US economic data. The Federal Reserve decided to leave its interest rates unchanged, while US jobless claims data showed a decline of 5,000 to 457,000.
Meanwhile, US inflation stayed unchanged in February following a 0.2% increase in the previous month to weigh on gold, which is also seen as an inflation hedge.
Gold was trading at US$1,121/oz today, while silver and platinum declined to US$17.28/oz and US$1,621/oz respectively.
Major miners were mixed today. In the FTSE 100, silver and gold miner Fresnillo (LSE: FRES) gained 1.3%, while platinum producer Lonmin (LSE: LMI) added less than 1%. Randgold Resources (LSE: RRS) posted a small loss.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Gold miner Petropavlovsk (LSE: POG) led the miners with a 1.7% advance, while Aquarius Platinum (LSE: AQP) gained 1% and silver producer Hochschild Mining (LSE: HOC) went against the tide, shedding 1.4%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) declined 31% on no news. Turkey focused gold miner Ariana Resources (AIM: AAU) and Africa focused gold miner Pan African Resources (AIM: PAF) followed, shedding 7.5% and 4.5% respectively.
Base metals mixed
Base metals were mixed as copper improved to US$3.39/lb, while nickel slid to US$10.24 and zinc was unmoved at US$1.04/lb.
Base metal miners were mixed. Eurasian Natural Resources (LSE: ENRC) was the top performer, advancing 2.3%. Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA) both added 1%, while BHP Billiton (LSE: BLT), Antofagasta (LSE: ANTO) and Rio Tinto (LSE: RIO) rose marginally.
Anglo American (LSE: AAL) was flat, while Vedanta Resources (LSE: VED) went against the tide, shedding less than 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) again outperformed the sector, rising 3.2%.
Uranium and copper explorer Kalahari Minerals (AIM: KAH) was the top performing junior, rallying 10%.
Banks, insurance, private equity
Part-nationalised banks were on fire today as Lloyds (LSE: LLOY) rallied 10% and Royal Bank of Scotland (LSE: RBS) surged 5%. Barclays (LSE: BARC) also did well, tacking on 2%, while HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) were flat.
Most insurance companies stayed close to the opening level today. Old Mutual (LSE: OML) and Admiral Group (LSE: ADM) climbed 1.6% and 1.3%, while peers Aviva (LSE: AV), Legal & General (LSE: LGEN), RSA Insurance Group (LSE: RSA) and Standard Life (LSE: SL) posted small gains.
Prudential (LSE: PRU) was flat.
Private equity group 3i (LSE: III) added 1.2%
Small Cap Movers
Other notable movers among the small caps included developer of vision based industrial systems Seeing Machines (AIM: SEE), which retreated 12%.
Large and Mid Cap News
Lloyds Banking Group (LSE: LLOY) said its trading performance has been strong in the first 10 weeks of 2010, and it believes it will be profitable on a combined businesses basis in 2010. Lloyds said it is pleased with its performance against each area of recent guidance, the bank's net interest margin is trending in line with recent guidance which has supported a good level of income growth.
Relations between Australia and China appear to be thawing quickly, just as Rio Tinto (LSE, ASX:RIO) and Chinalco, China's largest aluminium producer, start to look at ways to co-operate again on large undeveloped projects.
Imagination Technologies Group (LSE: IMG), a maker of processors for mobile devices and consumer electronics, said it was on track to hit its performance targets, expecting to ship 120 million units this year and meet the guidance of 200 million shipments in the next financial year.
Nexen (TSX: NXY) and its partner Royal Dutch Shell (LSE: RDSB) have made a significant oil discovery in the Eastern Gulf of Mexico at Appomattox, in Mississippi Canyon blocks 391 and 392.
Major European consumer-electronics retailer DSG International (LSE: DSGI) said it remains on track to deliver cost savings of £50m in the current financial year to 1 May 2010 and a further £150m over the following 3 years, as it updated investors on progress of its ‘Renewal & Transformation Plan’.
British transport and logistics company Stobart Group (LSE: STOB) said that the government has approved the proposed runway extension at London Southend Airport. The extension and the ongoing work on the airport’s new terminal will be completed in time for the London 2012 Olympics.
Small Cap News
Medicsight PLC (AIM: MDST), specialised in Computer-Aided Detection (CAD) and image analysis software which assists in the early detection and diagnosis of disease, said it appointed Troy Robinson to the board as chief financial officer and company secretary with immediate effect.
Cluff Gold (AIM: CLF; TSX: CFG) said the levels of production at the Kalsaka and Angovia mines are above the company’s current target of 100,000 ounces in 2010, and Cluff produced a total of 19,288 fine ounces of gold in January and February 2010. The gold was subsequently sold at an average price of US$1,112 per oz, and the company’s cash position improved by US$3.4m in the two month period ro stand at to US$5.7m on 28 February 2010.
Consort Medical (LSE: CSRT) said its plan to drive growth in the medium term has been progressing well and the business is set to hit its performance targets for the current year.
Gulfsands Petroleum (AIM: GPX) confirmed it has rejected the preliminary approach it announced yesterday regarding a possible offer for the company. Gulfsands said the board was unanimous in its view that the unsolicited approach was wholly inadequate and materially undervalues the company.
NCC Group (LSE: NCC) has acquired card services auditing and assurance company Meridian Services International Limited in a cash-only deal that could be worth up to £3 million.
In a note on Nighthawk Energy (AIM: HAWK), London-based stockbroker Daniel Stewart highlighted a series of events in Nighthawk’s development, expected over the coming months. The first will be the interims, followed by other events, which in Daniel Stewart’s opinion, will go a long way to de-risking the company’s Jolly Ranch project in the US.
Blacks Leisure Group (LSE: BLSA) has rejected an indicative, 62p per share cash offer for the company from Sports Direct International (LSE: SPD), calling the offer wholly inadequate. The specialist outdoor goods retailer said it intends to pursue a pre-emptive fundraising, which it considers to be in the best interest of its shareholders.
