Overview: the FTSE 100 rose slightly this morning, lifted by gains in the financial sector, which was recovering from yesterday’s falls caused by renewed concerns over Dubai’s debt situation after credit rating agency Moody’s downgrades six government-linked businesses to junk status.
Banks Standard Chartered (LSE: STAN) and Royal Bank of Scotland (LSE: RBS) were the top performers among the blue chips this morning with gains of 4% and 3.5% respectively. Sector peers HSBC (LSE: HSBA) and Lloyds (LSE: LLOY) followed with gains of 1.5%.
Other notable risers included InterContinental Hotels Group (LSE: IHT) and commercial property company Segro (LSE: SGRO), which advanced 3%, and fashion house Burberry (LSE: BRBY) with a gain of more than 2.5%.
Hedge fund manager Man Group (LSE: EMG) and pest giant control Rentokil (LSE: RTK) emerged as the biggest fallers in the index with losses of over 2%. Other notable fallers included beverage group SABMiller (LSE: SAB), utility company Seven Trent (LSE: SVT) and clothing retailer Next (LSE: NXT), which all slid 1.5%.
US stock index futures inched higher today, signalling a positive start on Wall Street following Tuesday’s declines on the back of negative economic data. The Dow Jones Industrial Average is projected to tack on about 0.3%, while the broader Standard & Poor’s 500 index and the technology heavy Nasdaq composite are seen marginally higher.
Commodities
Oil prices rose slightly following yesterday’s falls. January Brent Crude reached US$75.90/barrel, while US light, sweet crude for January delivery improved to US$73.62/barrel after falling below $73.
Oil and gas stocks were mixed this morning. Tullow Oil (LSE: TLW) was the only FTSE 100 constituent in the sector to stay above the opening level with a 1.2% advance. Petrofac (LSE: PFC) slid 1%, while BG Group (LSE: BG) and Cairn Energy (LSE: CNE) lost 1.3%. BP (LSE: BP) added 1.1%, while fellow supermajor Shell (LSE: RDSB) rose marginally.
Midcaps were mixed as Dragon Oil (LSE: DGO) gained nearly 1%, while Heritage Oil (LSE: HOIL) rose marginally and Dana Petroleum (LSE: DNX) posted a small loss.
South American Focused explorer Pan Andean Resources (AIM: PRE), which today received an acquisition offer from Petrominerals (TSX: PMG), was the top performer in the sector with a 22% surge. Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) followed with a 20% leap after increasing its resource estimate by 270% to 372 billion cubic feet of gas.
Other notable risers included Europe focused oil and gas developer Ascent Resources (AIM: AST), US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) and US focused junior Empyrean Energy (AIM: EME), which advanced 8%, 6% and 5.5% respectively.
Energy investor Xtract Energy PLC (AIM: XTR) and Kazakhstan operating Max Petroleum (LSE: MXP) headed in the opposite direction, slipping 7.5% and 4% respectively.
Gold, silver and platinum climb to bolster miners
Precious metals were on the rise today to recoup part of their recent losses. Gold rose to US$1,142/oz, while silver and platinum reached US$17.80/oz and US$1,421/oz respectively.
Most miners were in decline today. In the FTSE 100, Fresnillo (LSE: FRES) lost nearly 2%, while gold miner Randgold Resources (LSE: RRS) slid 1.5% and platinum producer Lonmin (LSE: LMI) posted a marginal loss.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) was flat.
Midcaps were mixed as while Aquarius Platinum (LSE: AQP) and gold miner Petropavlovsk (LSE: POG) shed 1.3%, silver producer Hochschild Mining (LSE: HOC) managed to stay above the opening level, tacking on less than 1%.
Iran focused gold explorer Persian Gold (AIM: PNG) was the top performer among the small caps with a 10% advance, while Africa operating gold and platinum miner Goldplat (AIM: GDP), Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Western Australia operating Norseman Gold (AIM: NGL) were in decline, shedding 7%, 5.5% and 5% respectively.
Base metals mixed
Base metals took different paths today as nickel and zinc rose to US$7.23/lb and US$1.03/lb respectively, while copper slid to US$3.13/lb.
Rio Tinto (LSE: RIO) and Xstrata (LSE: RIO) were the only major base metal focused stocks to post gains today, advancing 1.5% and 1% respectively. Anglo American (LSE: AAL) remained flat.
Sector peers Antofagasta (LSE: ANTO), BHP Billiton (LSE: BLT) and Kazakhmys (LSE: KAZ) declined marginally, while Eurasian Natural Resources (LSE: ENRC) pulled back 1.5%.
Vedanta Resources (LSE: VED) sank to the bottom of the pile with a 2.3% loss.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, sliding 1.8%.
Iron ore focused investor Red Rock Resources (AIM: RRR) and Laterite nickel specialist European Nickel (AIM: ENK) led the juniors with gains of 5.5% and 5% respectively, while Australia focused coking coal producer Caledon Resources (AIM: CDN) advanced 4%.
South American focused junior miner Herencia Resources (AIM: HER) and mineral sands producer Kenmare Resources (LSE: KMR) headed in the opposite direction, slipping 7.5% and 5% respectively.
Banks, insurance, private equity
With the exception of Barclays (LSE: BARC), which posted a marginal loss, the banking sector was in buying mode today with Standard Chartered (LSE: STAN) and Royal Bank of Scotland (LSE: RBS) emerging as the top performers, advancing 4.5% and 3.4% respectively. Lloyds (LSE: LLOY) and HSBC (LSE: HSBA) followed, adding nearly 1.5%.
Insurers also were mixed. Aviva (LSE: AV) was in the lead with a 2% gain, while car insurer Admiral Group (LSE: ADM) was flat. Legal & General (LSE: LGEN) was down 1%, Prudential (LSE: PRU), RSA Insurance Group (LSE: RSA) and Standard Life (LSE: SL) declined marginally, while Old Mutual (LSE: OML) was at the bottom of the pile with a 2.3% loss.
Private equity group 3i (LSE: III) rose marginally.
Home credit and motor finance specialist S & U PLC (LSE: SUS) added 2.3% after saying the group traded in line and its both businesses generated cash.
Large and Mid Cap News
International defence technology company, Cobham (LSE: COB) signed a $170 million (AUD) deal with Chevron Australia, to provide fixed wing aviation services to support Chevron's operations in the north-west until 2016. The agreement sees Cobham’s operations expand outside its core defence business.
UK listed oil and gas major, BG Group (LSE: BG) and its development partners, revealed further results program in the Santos Basin pre-salt, offshore Brazil. The conclusion formation testing on the Iara well, in the BM-S-11 appraisal area, has confirmed estimated recoverable volumes between 3 and 4 billion barrels of light oil and natural gas.
International mining group, BHP Billiton (LSE: BLT) (‘BHP’) signed an agreement to sell its Ravensthorpe Nickel Operation to fellow FTSE 100 miner First Quantum Minerals (LSE: FQM, TSX: FM) for US$340 million. BHP said it expects to finalise the sale during the first quarter of 2010. First Quantum plans to recommence the suspended operation.
Asian focused banking group, Standard Chartered (LSE: STAN) reported a continually strong performance for the year to date and aimed to re-assure investors in reference to its Dubai exposure. In the pre-close update, the banking group said it has delivered record levels of income and operating profit before tax.
Construction and support services group, Carillion (LSE: CLLN) announced its UAE based joint venture, Al Futtaim Carillion (AFC), has won a new £150 million contract to build the new Investment Council Headquarters in Abu Dhabi.
Small Cap News
Junior mineral exploration outfit, Horizonte Minerals (AIM: HZM) has added a second nickel project to its portfolio of precious and base metal projects in Brazil and Peru. Horizonte, with its local joint venture partner, LGA Mineração e Siderugia Ltda have secured the Tucuma Nickel Project in the western end of the Carajas mineral district in northern Brazil.
Financial spread betting and CFD provider, IG Group plc (LSE: IGG) said it expects to report a 13% increase in revenue to £143m and a 32% improvement in adjusted pre-tax profits to £77m for the six months ended 30 November 2009. The group’s ‘charges for doubtful debts’ also improved significantly to half a percent of total revenues.
Copper and nickel explorer Regency Mines (AIM: RGM) has commenced detailed planning of an exploration programme in the Lake Johnstone greenstone belt in Western Australia, to test nickel and gold targets based on the results of a SkyTEM aeromagnetic survey carried out in 2008.
London Mining (AIM: LOND, XETRA: L9K, OSX: LOND) said Snowden Mining Industry Consultants has confirmed a total JORC compliant resource for its 100 percent owned Isua iron ore project of 574 million tonnes at 37 percent Fe, including 114 million tonnes at 37 percent Fe of indicated resources, based on a 20 percent cut-off.
Africa focused investment company Lonrho (AIM: LONR) has raised a further £9.1 million via a placement on top of the £16 million raised earlier this month, providing a total £25.1 million of working capital to the group’s businesses.
Protective clothing and safety equipment provider, Cosalt (LSE: CSLT) has won a new 3 year contract to provide Babcock Rail with personal protection equipment (PPE). The contract covers the supply of safety footwear and Hi Vis GORE-TEX clothing, workwear and flame retardant PPE.
South American Focused explorer Pan Andean Resources (AIM: PRE) has received an offer from Petrominerals (TSX: PMG), which values the company’s Colombian and Peruvian assets at 15 pence and would leave the US and Bolivian interests with existing shareholders.
Aurelian Oil & Gas (AIM: AUL) said a new independent report on its petroleum interest has increased the group’s total contingent gas resources to 372 billion cubic feet, compared with its own preliminary estimates of 138 bcf used in its market update of October 26, an increase of 270 percent.
Home credit and motor finance specialist S & U PLC (LSE: SUS) said it was trading in line with market expectations for the full year to the end of January as both of its businesses performed well and continued generating cash.
Gemfields (AIM: GEM) has sold US$5.6 million worth of rough emeralds at the second auction it held this year after raking in US$5.9 million in July, achieving a higher average sales value of US$5.10 per carat compared to US$4.40 in the first auction.
UK based electrical components producer and supplier Cinpart (AIM: CINP) has landed a supply contract for spark electrodes from existing customer solutions supplier to the gas appliance industry Burner Systems International (‘BSI’).