Overview: the FTSE 100 turned early losses into gains, putting together a late rally to climb 1% after the jobless report released by the US Labor Department showed a fall in the unemployment rate to 10% from 10.2% in October as November saw the lowest number of job cuts since the inception of the economic crisis in late 2007.
The US stock market was off to a fast start with the Dow Jones Industrial Average and the broader S&P 500 index rallying 1.2%, while the technology heavy Nasdaq composite surged 1.7%.
Airline British Airways (LSE: BAY), pharmaceutical company AstraZeneca (LSE: AZN) and software developer Sage Group (LSE: SGE) made it to the top three in the blue chip index with gains of about 3%. Other notable risers included plumbing and heagin equipment manufacturer Wolseley (LSE: WOS), beverage group SABMiller (LSE: SAB) and another pharmaceutical stock GlaxoSmithKline (LSE: GSK), which added more than 2%. Imperial Tobacco Group (LSE: IMT) and British American Tobacco (LSE: BATS) both rose 2%.
Miners fell late in the afternoon as precious metals declined. Gold miner Randgold Resources (LSE: RRS) was the heaviest faller among the blue chips with a 3.7% loss. Property companies also declined with Hammerson (LSE: HMSO) and Liberty International (LSE: LII) shed 2% and 1% respectively.
Other notable fallers included engineering firm Amec (LSE: AMEC) and inter-dealer broker ICAP (LSE: IAP), which lost about 1.5%.
Commodities
Oil prices rose following the jobless update. January Brent Crude reached US$79.46/barrel, while US light, sweet crude for January delivery rose to US$77.51/barrel.
Oil and gas stocks rose as oil prices increased. Cairn Energy (LSE: CNE) led the pack, advancing 3%, while supermajors Shell (LSE: RDSB) and BP (LSE: BP) followed with gains of 1.7% and 1% respectively. Tullow Oil (LSE: TLW) added 1.3% and BG Group (LSE: BG) rose marginally.
Midcaps were mixed as while Dragon Oil (LSE: DGO) and Dana Petroleum (LSE: DNX) performed well, tacking on 1.5% and less than 1% respectively, Heritage Oil (LSE: HOIL) declined, posting a small loss.
North America focused oil & gas junior Pantheon Resources (AIM: PANR) was one of the leading risers among the juniors, climbing 6%.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) headed in the opposite direction, slipping 11%, while Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and US focused junior Empyrean Energy (AIM: EME) followed with losses of 6% and 5% respectively. Europe focused oil and gas developer Ascent Resources (AIM: AST) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) lost more than 4%.
Gold, silver and platinum retreat
Precious metals tumbled today after the jobless report boosted the US Dollar with gold declining to US$1,178/oz, while silver and platinum moved down to US$18.46/oz and US$1,453/oz respectively.
All major miners slid late in the day. Gold producer Randgold Resources (LSE: RRS) led the retreat, sliding 2.2%, while silver miner Fresnillo (LSE: FRES) and platinum producer Lonmin (LSE: LMI) posted losses of less than 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) advanced 1.5%.
Midcaps also fell with the exception of Aquarius Platinum (LSE: AQP), which barely held on to the opening level. Fellow FTSE 250 constituent silver producer Hochschild Mining (LSE: HOC) posted a small loss, while gold miner Petropavlovsk (LSE: POG) pulled back 2.2%.
Yamana Gold (LSE: YAU) tumbled 5.6%.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) led the juniors, advancing 9.5%, while Australian gold and copper prospector Solomon Gold (AIM: SOLG) followed with a gain of nearly 5%.
Commodity asset development company Mercator Gold (AIM: MCR), Tajikistan operating gold miner Kryso Resources (AIM: KYS) and Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) were among the biggest fallers in the sector, slipping 10.5%, 8.5%, and 6.5% respectively. Africa operating gold miner GMA Resources (AIM: GMA) was down 5%, while Africa operating gold and platinum miner Goldplat (AIM: GDP), Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) all lost more than 4%.
Copper and nickel recover
Base metals recouped some of their early losses, but still stood below yesterday’s levels. Copper and nickel climbed to US$3.21/lb and US$7.33/lb respectively, while zinc got back to US$1.07/lb.
Eurasian Natural Resources (LSE: ENRC) performed well, tacking on 2% to take the lead among the base metals focused stocks. Kazakhmys (LSE: KAZ) and Rio Tinto (LSE: RIO) rose marginally.
Xstrata (LSE: XTA) was at the bottom of the pile with a 1% loss, while Anglo American (LSE: AAL), Antofagasta (LSE: ANTO), BHP Billiton (LSE: BLT) and Vedanta Resources (LSE: VED) declined marginally.
Banks, insurance, private equity
Financial stocks were mixed today. Most banks recovered following an early weakness with the exception of Standard Chartered (LSE: STAN), which was down 2.5%. Royal Bank of Scotland (LSE: RBS) trimmed its loss to a minimum, while fellow bailed out bank Lloyds (LSE: LLOY) got back to the opening level. Barclays (LSE: BARC) and HSBC (LSE: HSBA) posted gains of less than 1%.
Insurers were mixed. Car insurer Admiral Group (LSE: ADM) and Standard Life (LSE: SL) tacked on 1%, while Aviva (LSE: AV), Legal & General (LSE: LGEN), Old Mutual (LSE: OML), Prudential (LSE: PRU) and RSA Insurance Group (LSE: RSA) all posted small losses.
Private equity group 3i (LSE: III) lost less than 1%.
Small Cap Movers
Other notable movers among the small caps included Machine to machine (M2M) communications specialist Telit Communications (AIM: TCM), which rallied 11%.
Large and Mid Cap News
Pharmaceutical group AstraZeneca (LSE: AZN) announced further progress for its Major Depressive Disorder (MDD) treatment pipeline. The US Food and Drug Administration (FDA) approved the once-daily SEROQUEL XR Tablets as an add-on to supplement antidepressant treatments in adults.
Major international mining group Rio Tinto (LSE, ASX: RIO) cemented its long term research relationship with The University of Queensland with the formation of the Rio Tinto Centre for Advanced Mineral Sorting. The research facility will be located at the Julius Kruttschnitt Mineral Research Centre in Brisbane, Australia.
Natural resources focused engineering consultants AMEC (LSE: AMEC) revealed its strategic goals and outlook for the next five years, including doubling EPS in the period. The 'Vision 2015' development programme is said to reflect a ‘shift in focus’ towards assured growth. In the more immediate future, AMEC said it remains firmly on track to deliver on its margin target of 8.5% in 2010 following "another year of improved performance".
FTSE250 resource company Ferrexpo (LSE: FXPO) has secured a new Pre-Export Financing (PXF) facility of up to US$230 million. The facility is being provided by a banking syndicate coordinated by Deutsche Bank (FWB: DBK) and also including several other major institutions such as JP Morgan (NYSE: JPM), UBS (NYSE: UBS), BNP Paribas and Fortis Bank (Euronext Paris: BNP).
Lonmin PLC (LSE: LMI) announced it has completed wage negotiations with the National Union of Mine Workers in respect of its Marikana operations. The operation is situated on the Western Limb of South Africa’s Bushveld Complex and contributes around 92% of Lonmin’s annual platinum group metals production with 10.2 million tonnes in the last year.
In the iconic 1987 film Wall Street, stock broker Bud Fox once remarked to the ruthless Gordon Gekko that Blue-Star Airlines was one of his best buys. Gekko immediately replied to Fox's sales pitch that airlines made lousy investments because of high fixed costs, volatile fuel prices and problematic unions. Looking at British Airways (LSE, BAY), Gekko has more than a point.
Small Cap News
Arbuthnot initiated coverage of Xcite Energy (AIM: XEL), giving the North Sea explorer a “strong buy” rating and setting the target price at 133 pence, which more than favorably compares to the stock’s current value of 39 pence.
Finders Resources (ASX: FND) will commence the first pass drill testing of high grade vein targets indicated by surface channel sampling at Ojolali Gold-Silver Project, following the arrival of a man-portable diamond drill.
Empyrean Energy PLC (AIM: EME) reported results for the first half to end-September 2009, a period in which it raised £2.44 million in three placings and farmed out half its holding in the Sugarloaf gas and condensate project in Texas, freeing it to focus on other high impact projects.
Europe focused oil and gas developer Ascent Resources (AIM: AST) said production testing on the PEN-105 well on its Nyrsieg South permit in Hungary initially flowed at over 78,000 cu m (cubic metres), or 2.75 mmscfd (million standard cubic feet per day) of gas per day.
Exeter Resource Corporation (AMEX: XRA, TSX: XRC, Frankfurt: EXB) announced that the underwriting syndicate of its recently completed equity financing raised a further US$7.5 million through the full exercise of the over-allotment option.
Edison Investment Research (“EIR”) has issued a note on IdaTech (AIM: IDA), saying it believes continued reduction of costs and competing on price with incumbent technology is key for the fuel cell maker's products to reach commercialisation.
Zimbabwe focused investment company LonZim (AIM: LZM) has raised £1.17 million via a placing of 4.25 million shares representing 12% of the company’s enlarged capital as economic growth in Zimbabwe seems to be taking shape.
University commercialisation company Fusion IP (AIM: FIP) said one of its portfolio companies, Morvus Technology Ltd, raised £2.15 million. The oncology focused pharmaceutical company intends to use the proceeds to progress its main drug development programs. In a separate agreement Morvus agreed a deal with Edinburgh-based NuCana BioMed Ltd, which will fund the clinical and commercial development of its ProTide technology.
Lonrho (LSE: LONR) has raised £16.025 million via a placing of 160.25 million shares to provide capital for its businesses and increase its equity stake in its core established businesses, particularly the agricultural and building divisions.
Altus Resource Capital Ltd (LSE: ARCL) announced plans to raise further capital this month to capitalise on its success as reported its net asset value (NAV) has risen 38.6% to 131.7 pence per share as at November 30 since the IPO in late June this year.
Wave power generator specialist Ocean Power Technologies Inc (AIM: OPT, NASDAQ: OPTT) has selected privately owned Oregon Iron Works to begin the construction phase of its commercial wave energy PowerBuoy system. The buoys will form a 1.5 megawatt wave-power project 2.5 miles offshore Oregon.
Evolution Securities took note of the third quarter report released by African Aura Mining Inc (AIM: AAAM; TSX-V: AAZ) early this week, saying it did not reflect the significant changes that are underway within the group and reiterating its “conservative” target price, which is almost three times greater than the stock’s current value of 53.5 pence per share.
Mediterranean Oil & Gas (AIM: MOG) said its key projects in Italy made progress and reached new milestones, expecting to update the certification of the oil reserves at Ombrina Mare in early 2010 and secure a production concession for the Guendalina gas field by year-end.