Overview: the FTSE 100 was sitting just below the opening level in the last hour of trading as investors were cautious ahead of the results form the Federal Reserve’s policy meeting.
The Fed is widely expected to announce a fresh stimulus package in an attempt to spur the slowing economic recovery.
It is unclear what the size of the new purchase programme is going to be.
Automatic Data Processing said that the private sector added 43,000 new jobs in October, which was ahead of market expectations, while the estimate for job losses for September was cut from 39,000 to 2,000.
Car insurer Admiral Group (LON:ADM) emerged atop the leaderboard with a gain of nearly 4%. Part-nationalised bank Lloyds (LON:LLOY) followed, rising 3.3%. Silver miner Fresnillo (LON:FRES), bank Standard Chartered (LON:STAN) and base metal miner Vedanta Resources (LON:VED) added just over 2%. Oil and gas supermajor BP (LON:BP) tacked on 2%.
Aerospace and defence systems manufacturer Cobham (LON:COB) was the heaviest faller in the FTSE 100, sliding 9.5% after issuing a profit warning. Antofagasta (LON:ANTO) followed with a 4% decline. Software company Sage Group (LON:SGE) and clothing retailer Next (LON:NXT) each lost 3%. Another software company Autonomy Corporation (LON:AU) lost 2.5%, as did defence contractor BAE Systems (LON:BA).
US stocks were off to a negative start with the Dow Jones and S&P 500 indexes shedding 0.3%. The technology heavy NASDAQ composite declined 0.4%.
Commodities
Oil futures were on the rise today with Brent Crude topping US$86/barrel.
Traders are now looking to the results of the Federal Reserve’s meeting in Washington, DC.
While the current ultralow interest rates are more than likely to stay the same, the Fed is expected to unveil a fresh stimulus package to spur the slowing recovery.
The Fed is looking to encourage more spending by driving up inflation from the current 10% and slash the unemployment rate, which currently stands at nearly 10%.
US light, sweet crude for December delivery advanced to US$84.81/barrel. January crude last traded at US$85.42/barrel on the New York Mercantile Exchange (NYMEX). December Brent Crude reached US$86.39/barrel on the ICE Exchange, while January Brent rose to US$86.59/barrel.
Major oil and gas stocks were mixed. BP (LON:BP) led the sector in the FTSE 100 with a 2% gain, while fellow supermajor Shell (LON:RDSB) declined 2.1%.
Tullow Oil (LON:TLW) rose marginally and BG Group (LON:BG) and Cairn Energy (LON:CNE) lost 1%.
Oil and gas engineering firms Amec (LON:AMEC) and Petrofac (LON:PFC) posted small gains.
JKX Oil & Gas (LON:JKX) led the midcaps with a 4.2% advance. Dragon Oil (LON:DGO) followed, rising 1%. Heritage Oil (LON:HOIL), Premier Oil (LON:PMO) and Soco International (LON:SIA) rose marginally.
Melrose Resources (LON:MRS) moved in the opposite direction, shedding 3.5%. Salamander Energy (LON:SMDR) was sitting just below the opening level.
Wood Group (LON:WG) advanced 2.2%, while another services company Wellstream Holdings (LON:WSM) declined marginally.
Dublin-headquartered upstream oil and gas exploration and production company Petroceltic International (LON:PCI) and North Sea explorers Xcite Energy (LON:XEL) were among the top risers in the sector with gains of 8%.
Gold holds steady
Gold fluctuated within a narrow range in the afternoon as investors were waiting for the outcome of the Federal Reserve’s policy meeting.
Gold last traded at US$1,355/oz, while silver and platinum retreated to US$24.81/oz and US$1,707/oz respectively.
Silver miner Fresnillo (LON:FRES) led the sector in the FTSE 100 with a 2.5% advance. Platinum miner Lonmin (LON:LMI) rose marginally, as did African Barrick Gold (LON:ABG), while fellow gold producer Randgold Resources (LON:RRS) posted a small loss.
In the FTSE 250, gold Petropavlovsk (LON:POG) dropped 3.5% after cutting its production guidance for the full year, while Aquarius Platinum (LON:AQP) declined marginally. Silver producer Hochschild Mining (LON:HOC) advanced 1.4%.
Gold and silver explorer Patagonia Gold (LON:PGD) shot up 22% after it reported the latest batch of drill results which revealed “exceptionally high grade” gold and silver from its COSE project in Argentina. Other top risers among the small caps included Latin America focused gold producer and explorer Orosur Mining (LON:OMI) and Fiji operating gold miner Vatukoula Gold Mines (LON:VGM), which added more than 7%.
Miners mixed
Copper fell to US$3.80/lb, while nickel and zinc improved to US$10.64/lb and US$1.099/lb.
Vedanta Resources (LON:VED) led the base metal miners with a 3% climb. Eurasian Natural Resources (LON:ENRC) climbed 1.35%.
Anglo American (LON:AAL) and BHP Billiton (LON:BLT) posted small gains.
Antofagasta (LON:ANTO) was at the bottom of the sector with a 4% loss. Kazakhmys (LON:KAZ) and Rio Tinto (LON:RIO) declined marginally.
Coking coal producer and explorer with operations in Queensland, Caledon Resources (LON:CDN, ASX:CCD) led the juniors, rallying 16%.
London’s only listed pure iron ore producer and FTSE 250 constituent Ferrexpo (LON:FXPO) stood just above the opening level.
Banks, insurance, private equity
Banks were on the rise today with the exception of Royal Bank of Scotland (LON:RBS), which posted a small loss.
Another part-nationalised bank, Lloyds (LON:LLOY), led the sector with a 3.3% gain. Standard Chartered (LON:STAN) also did well, rising 2.3%.
HSBC (LON:HSBA) and Barclays (LON:BARC) tacked on 1.5% and 1% respectively.
Insurers performed well today. Aviva (LON:AV), Legal & General (LON:LGEN), Old Mutual (LON:OML), Prudential (LON:PRU) and Standard Life (LON:SL) posted small gains, while RSA Insurance Group (LON:RSA) advanced 1.5%.
Car insurer Admiral Group (LON:ADM) advanced 3.7%.
Private equity group 3i (LON:III) rose 1%.
Small Cap Movers
Other notable movers among the small caps included African Medical Investments (LON:AMEI) and human tissue supplier Asterand (LON:ATD), which surged 8% and 9% respectively.
Small Cap News
Patagonia Gold (LON:PGD) shares soared over 20 percent after it reported the latest batch of drill results which revealed “exceptionally high grade” gold and silver from its COSE project in Argentina.
Solomon Gold (LON:SOLG) chairman Cameron Wenck believes there is an opportunity for the company to grow and mature into an integrated gold company. In the company’s final results statement Wenck highlighted that Solomon’s projects range from lower risk and more advanced prospects in Queensland, through to high-risk high-reward projects on Guadalcanal and Fauro Island.
Eurasia Mining (LON:EUA) has raised £1.3 million to support the development of the newly extended West Kytlim license in Russia. The placing was arranged by WH Ireland, and the company is issuing 132 million new shares at 1 penny each.
Avia Health Informatics PLC (LON:AVIA), developer and provider of clinical decision support systems worldwide, said it appointed Panmure Gordon (UK) Ltd as its nominated adviser and broker, and DLA Piper as legal advisers with immediate effect.
Shares in African Medical Investments (LON:AMEI) were lifted by news that the restructuring initiatives implemented recently are proving successful and are translating into increasing patient numbers and sales.
Shares in San Leon Energy (LON:SLE) rallied 12.7% in morning trade after expanding its concession for oil and gas reconnaissance and exploration in what it said was a very sought after shale gas area.
Active Energy Group (LON:AEG) can now focus on driving its voltage optimising business forward following the sale of its legacy businesses, Edison Investment Research analyst Richard Jeans said.
Interactive gaming company Netplay TV (LON:NPT) has raised £2.41 million net of expenses, which it believes will significantly strengthen the balance sheet as it restructures the business, so it can return to profitability.
Churchill Mining (LON:CHL) said the quest continues to find a partner to help the company finance the East Kutai Coal Project (EKCP) in Indonesia. It has employed Credit Suisse to find what managing director Paul Mazak recently called a “big brother with deep pockets” to fund the development of the mine, which has a net present value of US$1.3 billion.
African Aura Mining (LON:AAAM,TSX‑V:AUR) has hired a project manager to oversee the New Liberty gold deposit in western Liberia. Dr Martin White will manage the development of the 1.4 million ounce New Liberty gold project.
Asterand (LON:ATD) reported 30 percent year-on-year revenue growth in the third quarter, as it continues to reap the benefits of the BioSeek acquisition. The company said that BioSeek integration is progressing well and revenues are on track to meet its projections.
Epistem Holdings PLC (LON:EHP) said it was reappointed for up to 5 years as a preclinical testing services subcontractor to a US programme developing medical countermeasures against radiological threats, called MCART.
Large and Mid Cap News
Equipment delivery delays and adverse weather conditions in Russia’s Far East have forced Petropavlovsk (LON:POG) to cut its output forecasts yet again, pushing the share price down 4.5% in morning trade .