Overview: the FTSE 100 declined 0.6% despite a bigger than expected 4.3% rise in pending home sales in the US in August. The markets were under pressure from today’s update form the Commerce Department, which revised the estimate of the value of durable goods orders downwards from a 1.3% to a 1.5% decline, while nondurable orders rose just 0.3%, failing to meet expectations.
Telecommunications group BT (LON:BT.A) led the blue chips with a 2.5% advance. National Grid (LON:NG) followed, rising 2.3%. Plumbing and heating equipment manufacturer Wolseley (LON:WOS) and retailer Morrison Supermarkets (LON:MRW) each added 1.5%. Bank Standard Chartered (LON:STAN), hedge fund manager Man Group (LON:EMG) and gold miner African Barrick Gold (LON:ABG) tacked on just over 1%.
Oil and gas supermajor BP (LON:BP) was at the bottom of the pile with a loss of over 2%. Copper miner Kazakhmys (LON:KAZ) was down 2%. Business services company Serco Group (LON:SRP), insurer Prudential (LON:PRU), Anglo-Swiss miner Xstrata (LON:XTA), engineering firm Invensys (LON:ISYS) and oil and gas producer Cairn Energy (LON:CNE) declined 1.5%.
US stocks were off to a negative start. The Dow Jones Industrial Average dropped 0.5%, while the broader S&P 500 index lost 0.7%. The technology heavy NASDAQ composite retreated 1.1%.
Commodities
Oil prices track equities lower
Oil prices moved lower today, tracking losses in equity markets.
Crude oil futures rose well above the US$80/barrel level late last week after both the American Petroleum Institute (API) and then the US Energy Department reported declines in US inventories, a higher level of demand from the world’s largest energy consumer.
November Brent Crude last traded at US$83.35/barrel, while US light, sweet crude for November delivery stood at US$81.16/barrel.
Energy consultancy Schork Group has forecast that oil will be trading in the range between US$76.76/barrel and US$86.70/barrel and any attempt to break through that level would meet with “serious resistance”.
BP (LON:BP) declined 2.2%, while fellow supermajor Shell (LON:RDSB) posted a small loss, as did BG Group (LON:BG).
Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) lost 1.5% and 1% respectively.
Dragon Oil (LON:DGO) led the midcaps with a 5% rally. Salamander Energy (LON:SMDR) and Soco International (LON:SIA) advanced 1%, while Dana Petroleum (LON:DNX), Heritage Oil (LON:HOIL) and Premier Oil (LON:PMO) rose marginally.
JKX Oil & Gas (LON:JKX) posted a small loss and Melrose Resources (LON:MRS) declined 2.2%.
Services companies moved in different directions with Wood Group (LON:WG) shedding 1.2%, while Wellstream Holdings (LON:WSM) rose 2.3%.
US focused oil and gas company Nighthawk Energy (LON:HAWK, OTC:HEGY) was among the top performing juniors, surging 14%. European focused oil and gas exploration and production company Ascent Resources (LON:AST) and North Sea explorers Xcite Energy (LON:XEL) followed, rising 9% and 8.5% respectively.
South America operating oil and gas explorer and producer Gold Oil (LON:GOO) also did well, climbing 6.5%. US focused Caza Oil & gas (LON:CAZA) tacked on 5.5%.
Gold remains above $1,300
Gold prices moved slightly lower today, but the safe haven demand remained strong enough to support it well above the US$1,300/oz level.
Bloomberg said that 70% of traders, investors and analysts it has polled, predicted gold to continue rising this week. The accuracy of the surveys which the information agency has been conducting for six years is 58%.
Gold declined to US$1,314/oz, while silver and platinum retreated to US$22.09/oz and US$1,672/oz respectively.
Gold miner Randgold Resources (LON:RRS) declined marginally, as did peer from the FTSE 250 Petropavlovsk (LON:POG). Another gold producer, African Barrick Gold (LON:ABG), did better, advancing 1.7%.
Other blue chips, silver miner Fresnillo (LON:FRES) and platinum producer Lonmin (LON:LMI) shed less than 1%.
In the FTSE 250, Aquarius Platinum (LON:AQP) declined 1%, while silver producer Hochschild Mining (LON:HOC) climbed 1.3%.
Leyshon Resources (LON:LRL), which is focused on the Zheng Guang gold-silver-zinc project in Heilongjiang, was among the leading risers in the sector with an 11% climb. Kyrgyzstan focused gold producer Chaarat Gold Holdings (LON:CGH) and Fiji operating gold miner Vatukoula Gold mines (LON:VGM) added more than 8%. Kazakhstan operating gold and copper explorer and developer Frontier Mining (LON:FML) rose 7.5%.
Base metals hold steady
Kazakhmys (LON:KAZ) declined 2%, while Antofagasta (LON:ANTO), BHP Billiton (LON:BLT), Rio Tinto (LON:RIO) and Xstrata (LON:XTA) shed more than 1%.
Anglo American (LON:AAL), Eurasian Natural Resources (LON:ENRC) and Vedanta Resources (LON:VED) posted small losses.
London’s only listed pure iron ore producer and FTSE 250 constituent Ferrexpo (LON:FXPO) outperformed the sector, advancing 2%.
Australia and Papua New Guinea operating nickel and copper explorer Regency Mines (LON:RGM) led the juniors with a 12% gain.
Mineral exploration company focused on the discovery and development of gold, uranium and other minerals, Red Rock Resources (LON:RRR), followed, climbing 8%.
Banks, insurance, private equity
Banking stocks were in demand today. Standard Chartered (LON:STAN) was in the lead with a 1.4% climb. Barclays (LON:BARC), HSBC (LON:HSBA), Lloyds (LON:LLOY) and Royal Bank of Scotland (LON:RBS) tacked on less than 1%.
Aviva (LON:AV) and RSA Insurance Group (LON:RSA) posted small gains, while other insurers declined.
Admiral Group (LON:ADM), Old Mutual (LON:OML) and Standard Life (LON:SL) lost nearly 1%, while Legal & General (LON:LGEN) and Prudential (LON:PRU) dipped 1.3% and 1.6% respectively.
Private equity group 3i (LON:III) rose 1%.
Small Cap Movers
Other notable movers among the small caps included voltage optimisation specialist Active Energy Group (LON:AEG), which rallied 7%. Last week, Edison Investment Research said that despite the sales cycles being longer than expected, the market for voltage optimisation still looks significant, both in the UK and overseas.
StatPro (LON:SOG), which provides portfolio analytics services for asset management firms, also did well, tacking on 5%.
Small Cap News
Mediterranean Oil & Gas PLC (LON:MOG) has appointed CIBC World Markets to review its strategic options, including a possible sale of the company.
African Diamonds (LON:AFD) has recommended a takeover offer from Lucara Diamonds Corp (TSX-V:LUC) which values the company at C$82 million, approximately £51 million.
Nyota Minerals (LON:NYO, ASX:NYO) today unveiled more encouraging test results from its flagship Tulu Kapi gold project in Ethiopia. Test work carried out on samples taken in July reveal they contain gold grades ranging from 8.16 grams per tonne right the way down to 0.14 grams.
Pan African Resources (LON:PAF) has agreed to sell a 85.1% beneficial interest in its Akrokerri gold project in Ghana, from which it withdrew in early 2009. The stake will be sold to fellow AIM listed miner GoldStone Resources (LON:GRL), which believes that the permit is prospective. Goldstone is the party that announced the deal this mornming.
StatPro Group (LON:SOG) has contracted a major custodian bank to integrate the bank's client data with its newly launched portfolio analysis software - StatPro Revolution. The software as a service (SaaS) platform was initially launched, though a public Beta testing phase, earlier this year.
Noventa (LON:NVTA) today provided investors with more details on its planned listing in Toronto, announcing the appointments of Canaccord Genuity as joint broker. The Mozambique focused tantalum miner has also named Computershare its registrar in Jersey with a branch register in Canada.
Leyshon Resources (LON:LRL, ASX:LRL) shares advanced over 10% in early London deals after it revealed plans to acquire highly prospective coal assets in South West Mongolia.
Red Rock Resources (LON:RRR) is set for a significant cash boost as its investment in Kansai Mining (TSX-NEX:KAN) is about to realise a massive C$10.4 million gain. Last week Kansai agreed to sell its interests in two subsidiaries to a private equity group for C$40 million.
Daniel Stewart & Company (DS&C) has upgraded its 2011 forecasts for Asterand (LON:ATD) following last week’s major contract win. On Friday, the AIM quoted human tissue supplier announced a five year contract worth up to US$24.3 million with the US National Cancer Institute (NCI) to supply clinically annotated human biospecimens.
Shares in software group Focus Solutions Group (LON:FSG) soared 45% by late morning today after it secured the largest deal in its history. The group provides multi-channel distribution software to the global financial services industry.
Evolution Securities oil expert David Farrell expects Rockhopper Exploration (LON:RKH) to carry out a rights issue sooner rather than later. The analyst noted a newspaper report over the weekend, which claimed a US$150 - US$200 million rights issue is being planned by the AIM-listed explorer.
Panmure Gordon has initiated coverage of e-Therapeutics (LON:ETX), whose technology platform it said could change how the pharmaceutical company conducts drug development. The e-Therapeutics platform can be applied both to discovering new effective and safe medicines, and evaluating the efficacy and safety of specific molecules.
Shares in EnCore Oil PLC (LON:EO) rose on AIM today after the group announced promising initial results of the second side-track on UK Northern North Sea Block 210/29a which contains the Cladhan discovery.
SeaEnergy’s (LON:SEA) wind power business is worth more than the group’s market value on London’s AIM market, according to Ambrian Capital's clean-tech analyst Gurpreet Gurjral. In a note to investors Gurjral said he would be reviewing his valuation and rating for SeaEnergy in the near term.
Deltex Medical (LON:DEMG) shares jumped nearly 19 percent in late afternoon deals to 15.75 pence in the wake of a positive report from the National Institute for Health and Clinical Excellence (NICE), the advisory body for the NHS.
Large and Mid Cap News
Rio Tinto Alcan (LON:RIO, NYSE:RTP, ASX:RIO) said it has invested an additional US$140 million in its aluminum smelter in Straumsvik, Iceland, bringing its total invesment in the ISAL smelter to US$487 million.