Overview: as was expected, the FTSE 100 switched into bullish mode this morning, adding 0.6% after stock markets in the US and Asia put up a strong performance, boosted by a better than expected Q3 report from aluminium producer Alcoa. Metals prices also continued their surge, with Gold testing US$1,060/oz and Silver approaching US$18/oz.
Indian miner Vedanta (LSE: VED) led the blue chips with a 4% climb. Sector peers Xstrata (LSE: XTA) and Anglo American (LSE: AAL) came close, advancing 3.5%.
Quality and safety services provider Intertek Group (LSE: ITRK), packaging group Rexam (LSE: REX) and telecom group BT (LSE: BT) also were in demand with all adding over 3%.
Software developer Autonomy Corporation (LSE: AU) also made it to the leaderboard with a gain of almost 4% after saying it expected good Q3 results with revenues likely to be ahead of expectations.
Pharmaceutical company Shire (LSE: SHP) and bailed out banks Lloyds (LSE: LLOY), which is reportedly mulling a massive cash call to get out of the government’s asset protection scheme, and Royal Bank of Scotland (LSE: RBS) were the only FTSE 100 constituents to decline 1% or more this morning.
US stock index futures rose this morning, buoyed by Alcoa’s results, pointing to a higher start on Wall Street today.
Commodities
Oil prices were in decline in the morning with November Brent Crude easing below US$68/barrel, while US benchmark crude slid to US$70.17/barrel.
However, with the exception of supermajors BP (LSE: BP) and Shell (LSE: RDSB), which slipped into the red in early trade, all major oil and gas stocks rose, recouping some of yesterday’s losses.
BG Group (LSE: BG) rose marginally in the morning. Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) both added 2%, while Cairn Energy (LSE: CNE) was up 1.5%.
Mid caps also were in buying mode. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) both added more than 1%, while Heritage Oil (LSE: HOIL) was unmoved.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) were among the leading fallers in the sector, shedding over 7%.
Latin America operating Gold Oil (AIM: GOO) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) both declined 3%.
North American based explorer Nighthawk Energy (AIM: HAWK) and Europe focused oil and gas developer Ascent Resources (AIM: AST) did better with both tacking on 5%.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was up 3.5%. Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico, added 2%.
Gold and Silver stay on the rise to boost miners
Gold continued climbing today, sitting at US$1,055/oz at midday. Silver was just 20 cents short of US$18/oz. Platinum added US$12 to US$1,339/oz.
Major mining stocks were strong in early trade, bolstered by higher metals prices. Gold producer Randgold Resources (LSE: RRS) was the leading riser among the blue chip miners with a 3% climb. Platinum miner Lonmin (LSE: LMI) followed with a 2.5% gain. Silver miner Fresnillo (LSE: FRES) climbed 1.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) improved 1.5%.
In the FTSE 250, silver producer Hochschild Mining (LSE: HOC) was quick to recover from yesterday’s 9% dip following a cash call announcement, gaining 4% in the morning. Gold miner Petropavlovsk (LSE: POG) rallied 6.7%. Aquarius Platinum (LSE: AQP) added 2.5%.
Commodity asset development company Mercator Gold (AIM: MCR) led the sector with an 11% rally on the news that it hired Deutsche Bank as its depositary bank to issue American Depositary Receipts to facilitate its North American investor base.
Nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR), Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) all added 5%.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) rose 4.5%, while Western Australia operating Norseman Gold (AIM: NGL) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) climbed 3%.
Copper and gold miner EMED Mining (AIM: EMED) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) went in a different direction, shedding 4.5% and 3.3% respectively.
Nickel and Copper climb
Copper and Nickel advanced further after posting good gains yesterday to buoy base metals focused stocks. Copper rose to US$2.83/pound, while Nickel reached US$8.68/pound. Zinc was just short of US$0.90/pound.
Indian miner Vedanta Resources (LSE: VED) was in the lead with a gain of almost 4% after releasing its Q2 production report. Antofagasta (LSE: ANTO), Anglo American (LSE: AAL) and Anglo-Swiss miner Xstrata (LSE: XTA) followed, advancing 3.5%. Kazakhmys (LSE: KAZ) and Rio Tinto (LSE: RIO) rose 3%.
Eurasian natural resources (LSE: ENRC) added 2.7%, while BHP Billiton (LSE: BLT) improved 2%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, adding 2%.
Botswana operating nickel and copper miner Discovery Metals (AIM: DME) was in the lead among the small caps in the sector with a 6% gain after announcing a joint venture exploration programme with Japan Oil Gas and Metals National Corporation (JOGMEC) for the Dikoloti Nickel Project in north-east Botswana.
Specialty minerals exploration and development company Thor Mining (AIM: THR) went in a different direction, shedding 6.7% in early trade.
Bank, insurance, private equity
With the exception of Standard Chartered (LSE: STAN), which rose 1.5%, all major banking stocks were in decline this morning. Lloyds (LSE: LLOY), said to be mulling a £15 billion cash call to avoid participation in the government’s asset protection scheme, emerged as the leading faller with a 3% decline, while fellow bailed out bank Royal Bank of Scotland (LSE: RBS) lost 1.3%.
Barclays (LSE: BARC) and HSBC (LSE: HSBA) declined marginally.
Insurance companies did better. Legal & General (LSE: LGEN) was in the lead with a 2.6% climb, while Prudential (LSE: PRU) followed with a 2.4% advance. Friends Provident (LSE: FP), Old Mutual (LSE: OML) and Standard Life (LSE: SL) all added about 1%. RSA Insurance Group (LSE: RSA) and Aviva (LSE: AV) moved against the tide, posting marginal declines.
Private equity group 3i (LSE: III) rose 1.2%.
Large and Mid Cap News
Hochschild Mining PLC (LSE: HOC) completed the placing and convertible bond offer it announced yesterday, raising US$260 million it plans to use for further acquisitions, for further investments in Lake Shore Gold Corp (TSX: LSG) and Gold Resource Corp (OTCBB: GORO) as well as for paying down debt.
Vedanta Resources (LSE: VED) released their quarterly and half yearly production report, the report highlights the groups increasing production output, particularly Iron Ore and Aluminium. Q2 Iron ore production reached 3.3 million tonnes (mt) an increase of 27% while Aluminium production rose 13%, Zinc and lead mined metal production operating at rated capacity. Vedanta’s copper operations were reduced due to scheduled smelter maintenance in Zambia.
Auto, cycling and leisure products retailer, Halfords Group (LSE: HFD) was the best performing share in the FTSE 250 this morning after the company delivered a solid update for trading in the second quarter and maintained its guidance for the full year.
Small Cap News
Mercator Gold Plc (AIM: MCR) announced the appointment of Deutsche Bank as its depositary bank, to issue American Depositary Receipts (ADRs). Mercator intends to expand its North American investor base as they continue to make progress on the emerging Copper Flats development in New Mexico. In the same breath, Mercator also announced that it had mandated SRK Consulting to complete a NI 43-101 compliant resource Assessment to progress the latest project.
Discovery Metals (ASX: DML) has formed a joint venture exploration programme with the Japan Oil Gas and Metals National Corporation (JOGMEC) for the Dikoloti Nickel Project in north-east Botswana, Africa.
Accsys Technologies PLC (AIM & NYSE Euronext: AXS) said it was notified by OP-Fund Management Co Ltd, a Finnish institutional investor, that it has acquired 1.7 million additional shares in the company.
Argentina focused gold explorer Patagonia Gold (AIM: PGD) upped the resource estimate for its Cap-Oeste gold and silver project in Argentina by 89% following a drilling campaign which it said confirmed the presence of a wide gold mineralised structure with a core containing bonanza gold and silver.
India based animation and gaming group DQ Entertainment PLC (AIM: DQE) announced a co-production agreement with French animation and French producer Gaumont-Alphanim with an estimated budget of €6.9 million.
In a brief statement to the stock exchange this morning, Rockhopper Exploration (AIM: RKH) acknowledged recent speculation surrounding its financing activities for drilling in the North Falkland Basin. The oil and gas explorer confirmed its considering a variety of options including an equity placement.
Hutchison Whampoa’s subsidiary Hutchison China MediTech Limited (Chi-Med; AIM: HCM) said today its wholly owned subsidiary Hutchison Organic Holdings Limited entered into a joint venture (JV) agreement with The Hain Celestial Group (NASDAQ: HAIN) to market and distribute infant and toddler feeding products in China and other markets.
Shares in Baobab Resources PLC (AIM: BAO) rose strongly after the company reported “ very encouraging” results of a scoping study undertaken for its Tete magnetite (iron/vanadium) and ilmenite (titanium) project in Mozambique.
Mid-sized British hotel group, Peel Hotels (AIM: PHO) released H1 interim results today, in which they reported a 5.5% increase in turnover and a post tax profit of approximately £1.1 million. Peel Hotels stated that it was difficult to determine whether the improved performance is a result of stabilising economic conditions or an increase in market share. The initial headline figures add polish to a disappointing start the trading period.
Northern Petroleum PLC (AIM: NOP) said it has discovered gas at the Tiendeveen-1 exploration well in the Drenthe III licence in the northeast Netherlands.