logo-loader

BP, BG and Cairn fall as oil slumps, Shell down on Q3 report, but FTSE 100 climbs as financials rise

Last updated: 12:22 29 Oct 2009 GMT, First published: 13:22 29 Oct 2009 GMT

no_picture_pai

Overview: as was predicted, the FTSE 100 declined in early trade, shedding 0.2% despite a strong recovery in the banking sector, where partly nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) recouped most of their recent losses, rallying 10% and 7% respectively after Lloyds confirmed it was engaged in talks with the authorities about alternatives to participating in the government’s toxic asset protection scheme. Barclays (LSE: BARC) also did well, erasing yesterday’s losses with a gain of 3.4%.

However, energy stocks were lower as oil prices continued their freefall, while Shell (LSE: RDSA) weighed on with a loss of more than 5% after releasing disappointing quarterly results, which showed a 73% decline in net profit with the company simultaneously announcing plans to cut 5,000 jobs. Fellow energy giant Eni (NYSE: E, BIT: ENI) said its Q3 profit was down, also slashing its production target to push the sector further down. Another oil company ExxonMobil (NYSE: XOM) is also due to release its quarterly figures today.

Later in the afternoon the Footsie returned to positive territory, getting a boost from the mining sector, which grew stronger after a modest recovery in metals prices in the morning.

Stock index futures in the US pointed to a higher start on Wall Street today after the US GDP update revealed a 3.5% growth, while analysts polled by Reuters expected a growth of 3.3% at an annualised rate following a 0.7% decline in Q2. The increase was the first in a year.

Other majors reporting quarterly results today are Colgate-Palmolive (NYSE: CL), Motorola (NYSE: MOT), Procter & Gamble (NYSE: PG) and Sprint Nextel (NYSE: NYSE: S).

Commodities

Oil prices slightly improved from morning’s levels. December Brent Crude was at US$76.22/barrel, while US light, sweet crude for December delivery rose to US$77.75/barrel.

Shell was the leading faller in the sector with a 5.5% loss, while fellow supermajor BP (LSE: BP) declined marginally, as did Petrofac (LSE: PFC). BG Group (LSE: BG) slid 3% to 1,063 pence, while Cairn Energy (LSE: CNE) lost 2%.

Tullow Oil (LSE: TLW) was the leading performer in the sector with a small gain.

Midcaps did slightly better as Heritage Oil (LSE: HOIL), Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) stayed around the opening levels.

Juniors were mixed.

Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) recouped its recent losses with a 6% climb, while Kazakhstan operating Max Petroleum (LSE: MXP) and Europe focused oil and gas developer Ascent Resources (AIM: AST) followed with both tacking on more than 4.5%.

Iraq operating Irish oil company Petrel Resources (AIM: PET) headed in a different direction, shedding more than 6%.

Precious metals

Metals prices also showed slight improvement with Gold inching higher to US$1,032/oz and Silver climbing to US$16.29/oz. Platinum rose to US$1,315/oz.

With the exception of silver miner Fresnillo (LSE: FRES), which gained 3%, FTSE 100 miners were flat. Gold producer Randgold Resources (LS:E RRS) and specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally, while platinum miner Lonmin (LSE: LMI) started the day with small losses.

Midcaps were more volatile. Aquarius Platinum (LSE: AQP) was in the lead, advancing 4.8%, while gold producer Petropavlovsk (LSE: POG) followed, adding 3%. Silver miner Hochschild Mining (LSE: HOC) was at the bottom of the pile with a 1% loss.

South American based explorer Mariana Resources (AIM: MARL) emerged as the top performer in the market for a second day in a row, surging 26% after climbing 10% yesterday on an announcement of a gold silver discovery at its Dos Calandrias project in Argentina.

Philippines focused Metals Exploration (AIM: MML) gained 7% after its Runruno gold-molybdenum project was endorsed by Philippines President.

Tajikistan operating gold miner Kryso Resources (AIM: KYS) also did well, climbing 5% on no news.

Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) led the fallers, shedding 8% and 7%.

Copper and gold miner EMED Mining (AIM: EMED), South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and South Africa focused emerging platinum producer Platmin (AIM: PPN) lost more than 4%, as did Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM).

Africa focused gold miner Pan African Resources (AIM: PAF), Asian focused explorer Central China Goldfields (AIM: GGG) and Turkey focused gold miner Ariana Resources (AIM: AAU) retreated 3.5%.

Base metals were mixed. Copper continued its slump, moving down to US$2.91/pound, while Nickel slightly improved, rising to US$8.13/pound. Zinc added 1 cent to reach US$0.98/pound.

Base metals focused stocks were on the rise on Thursday.

Kazakhmys (LSE: KAZ) was in the lead with a 5% climb after saying it was on track to meet copper output targets. Anglo American (LSE: AAL) and Xstrata (LSE: XTA) followed with gains of 3.5%. Eurasian Natural Resources (LSE: ENRC) tacked on almost 3%, while Antofagasta (LSE: ANTO) and Rio Tinto (LSE: RIO) both added 2%.

The world’s largest miner BHP Billiton (LSE: BLT) added 1.6%, while Vedanta Resources (LSE: VED) rose marginally.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, climbing 1.3%.

Juniors were mostly in decline.

Specialty minerals exploration and development company Thor Mining (AIM: THR), Botswana operating nickel and copper miner Discovery Metals (AIM: DME) and Tunisia focused metal miner Maghreb Minerals (AIM: MMS) emerged as the leading fallers with losses of 12%.

South American focused junior miner Herencia Resources (AIM: HER) and mineral sands producer Kenmare Resources (LSE: KMR) followed with losses of over 4%. Iron ore focused investor Red Rock Resources (AIM: RRR) declined 3.5%.

Banks, insurance, private equity

Lloyds (LSE: LLOY) and RBS (LSE: RBS) were in the lead with gains of 7% and 10% respectively. Barclays (LSE: BARC) tacked on 3.4%.

Standard Chartered (LSE: STAN) advanced 1.6%, while HSBC (LSE: HSBA) posted marginal gains.

Insurers also were on the rise. Prudential (LSE: PRU) led the way with a 5% climb, while Old Mutual (LSE: OML) and Legal & General (LSE: LGEN) followed with gains of 3% and 2% respectively. RSA Insurance Group (LSE: RSA) racked on 1.8%, while Aviva (LSE: AV) and Friends Provident (LSE: FP) opened with marginal gains.

Standard Life (LSE: SL) went against the tide, shedding less than 1%.

Private equity group 3i (LSE: III) rose marginally.

Small Cap Movers

Other notable movers among the small caps included Zimbabwe focused investor LonZim (AIM: LZM), which slipped 6.6%.

Large and Mid Cap News

Yellow pages directory publisher and FTSE 250 constituent Yell Group (LSE: YELL) has decided to further extend the deadline for its lenders to respond to its restructuring proposals by another day to 5 PM Thursday, which is the third extension.

Royal Dutch Shell (LSE: RDSB) reported this morning that third quarter profitability had fallen sharply compared to 2008 when oil prices were significantly higher. Shell’s earnings were reduced by around 70% on a current cost of supplies (CCS) basis, to US$3 billion compared to US$10.9 billion a year ago. Net capital investment for the quarter was $7.4 billion. Total dividends paid to shareholders during Q3 were $2.7bn. Gearing was 13.7% at the end of the quarter and Cash flow from operating activities for Q3 was $7.3bn.

National Express (LSE: NEX) said this morning that it does not intend to explore the possibility of a combination with Stagecoach Group (‘Stagecoach’)(LSE: SCG). The company has been subject to several protracted discussions with several parties in recent months as it has explored options to reduce debt and maintain compliance with its banking covenants beyond December 2009.

Small Cap News

Norcon PLC (AIM: NCON), a specialist in project management and outsourcing in the telecommunications, defence and IT sectors, said it has signed a two year contract extension with the UAE Armed Forces.

Shares in wireless technology specialist CSR (LSE: CSR) jumped 6% this morning after the Company reported third quarter results which showed a return to profitability. During the period CSR achieved revenues of $210 million and an 86% improvement in operating profits to $10.6 million, compared to a $26.3 million loss last quarter. The performance included strong revenues from both the Bluetooth and GPS division of $150.4m and $59.5m respectively.

Metals Exploration PLC (AIM: MTL) said the Financial and Technical Assistance Agreement (FTAA) for the Runruno gold-molybdenum project on the island of Luzon in the northern Philippines has been signed by order of President Macapagal-Arroyo, thus upgrading the project from its previous exploration permit status.

Electronic components manufacturer Acal (LSE: ACL) has agreed to acquire specialist distributor of electronic and photonic components BFi OPTiLAS for €10 in cash and 2 million ordinary shares.

Ambrian Capital issued a note on African focused nickel and gold exploration and development junior Nyota Minerals (AIM, ASX: NYO), lifting its rating on the stock to ‘BUY’ from ‘Speculative Buy’ following a site visit to the Tulu Kapi gold project in western Ethiopia this month. It has an initial price target of 11.4 pence a share, a significant upside compared to the current level of around 6.88p.

London listed Brulines Group (LSE: BRU) announced today a partnership with Greene King Pub Partners for the roll out of its real time monitoring systems for Greene’s 1,400 pubs throughout the United Kingdom beginning first quarter 2010.

Southern African resource company North River Resources (AIM: NRRP) has raised £7 million to fund the exploration and development of its assets in southern Africa, advancing towards its goal of assembling a portfolio of multi-commodity assets with mid-term production potential.

Norseman Gold (AIM & ASX: NGL) has approved the commencement of the OK Decline, the third mine at its flagship Norseman Gold Project in Western Australia, leading it to upgrade its full year production forecast to between 80,000 and 85,000 oz of gold from the previous guidance of 75,000 to 80,000 oz.

Animal feed and health products manufacturer Eco Animal Health Group (AIM: EAH) said the European Medicine Agency (EMEA) approval for a new concentrated form of its Aivlosin oral powder for pigs throughout Europe, helping it establish a footing in major pig markets such as Germany and Denmark, where oral powders are used in preference to licensed premixes.

Poundstretcher retail chain owner, Instore Plc (AIM: INST), announced first half interim results this morning, reporting a loss before taxation of £3.7 million.

Goldplat PLC (AIM: GDP) said London-based Slater Investments Ltd  last week acquired 6 million shares in the company and thus holds 5.37 percent of the issued share capital.

Dubai headquartered hotel and resort acquisition and development company Kingdom Hotel Investments (LSE, NASDAQ Dubai: KHI) said revenues per available room (RevPAR) for the third quarter slid 9%, which it said was in line with general market trends.

Hightex Group plc (AIM: HTIG) announced that it has been awarded its largest contract to date - worth €18.9 million - to supply the membrane roof and cable system for the Olympic Stadium in Kiev, Ukraine. The new roof is part of the ongoing redevelopment of the Kiev stadium for the UEFA 2012 Euro football championships.

Strategic Natural Resources PLC (AIM: SNRP) reported results for the first half to August 31 2009, saying it has achieved its first revenues from sales of coal extracted under its mining right for test marketing purposes during the period which saw continuing investment in drilling and mine development.

Sinclair Pharma PLC (LSE: SPH) said it has entered into new debt facilities over £9 million plus a £3 million facility to replace Sinclair's existing facility, which means the proposed equity fundraising announced on October 12 2009 will be scaled back, as planned, to £18 million from the maximum of £25 million announced.

Financial services group and FTSE 250 constituent Evolution Group (LSE: EVG) said it expected its full year profit to exceed market forecasts as trading remained strong across all of its businesses.

Precious and base metals group Landore Resources Ltd (AIM: LND) said it is placing 7.86 million new shares at 14 pence a share to raise approximately £1.1 million before expenses and is planning to use the money to finance working capital and exploration expenditure.  Landore raised the capital without the assistance of a broker, underlying the company's strong shareholder base and contacts, and avoiding brokerage fees.

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

16 minutes ago