Wall Street opens higher to bolster FTSE 100 as blue chips stay above 5,100
Overview: the FTSE 100 started the day well, gaining about 50 points on positive news from the US, where Q3 corporate reporting got off to a positive start with aluminium producer Alcoa announcing better than expected quarerly results. However, the UK blue chip index had its gains trimmed to just 20 points in late afternoon, dragged down by InterContinental Hotels Group (LSE: IHT), mobile operator Vodafone (LSE: VOD) and defence systems manufacturer BAE Systems (LSE: BA), all of which declined over 2%.
More news arrived later when Bank of England decided not to follow Australia’s Reserve Bank and refrained from lifting its interest rates just yet, leaving them unchanged at a record low of 0.5%, also sticking to its £175 billion quantitative easing programme. This decision was expected by the market and had little impact on the FTSE 100.
Mining stocks led the market for the better part of the day, however fashion house Burberry (LSE: BRBY) emerged atop the leaderboard in late afternoon with a 4.6% gain. Tullow Oil (LSE: TLW) followed with a 4.3% climb, trailed by copper miner Kazakhmys (LSE: KAZ), which tacked on 4%.
US stock index futures rose in the morning and Wall Street started higher with the Dow Jones industrial average gaining 0.6%.
Commodities
Oil prices didn’t see much change during the day. November Brent Crude rose to US$68.09/barrel, while US benchmark crude held steady at US$70.20/barrel.
Major oil and gas stocks mostly rose today. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) traded within a narrow range throughout the day, staying around the opening levels. BG Group (LSE: BG) also had a quiet day, posting only marginal gains.
Petrofac (LSE: PFC) and Cairn Energy (LSE: CNE) did better with both tacking on 2%. Tullow Oil (LSE: TLW) outperformed the sector with a 4.4% climb.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) led the sector with a 13% rally. North American based explorer Nighthawk Energy (AIM: HAWK) followed with a 9% surge following a bullish note from equity research company GE&CR. Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) also climbed 9%.
Europe focused oil and gas developer Ascent Resources (AIM: AST) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) gained 5% each.
Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) climbed almost 3%.
Latin American operating oil and gas company Gold Oil (AIM: GOO) went in a different direction, shedding 8%. EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and Mongolia-focused Petro Matad (AIM: MATD) followed with declines of about 6%.
Precious metals
Gold failed to hold on to the record levels and eased below US$1,050/oz. Silver also retreated after taking a shot at US$18/oz, arriving at US$17.61/oz. Platinum also took a step back, sliding to US$1,330/oz.
Mining stocks were in buying mode owing to another round of increases in gold, silver and platinum prices. Platinum producer Lonmin (LSE: LMI) was in the lead with a 3% climb, while gold miner Randgold Resources (LSE: RRS) tacked on 2.7%. Silver miner Fresnillo (LSE: FRES) rose 2.1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) added 1.3%. Yamana Gold (LSE: YAU) climbed 3%.
In the FTSE 250, gold producer Petropavlovsk (LSE: POG) rallied 6% to erase yesterday’s losses. Silver producer Hochschild Mining, which slipped over 9% on a cash cal announcement yesterday, added 1.3%. Aquarius Platinum (LSE: AQP) also did well, advancing 4.3%.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Turkey focused gold miner Stratex International (AIM: STI) led the juniors, adding more than 6%. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML), Brazil focused gold miner Horizonte Minerals (AIM: HZM) and Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) all added 5%, as did Argentina focused gold explorer Patagonia Gold (AIM: PGD).
Canada-based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) rose 4.5%. Commodity asset development company Mercator Gold (AIM: MCR), Western Australia operating Norseman Gold (AIM: NGL) and Diamond miner with assets in Sierra Leone and Guinea West African Diamonds (AIM: WAD) posted gains of almost 4%.
Nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR) and UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) added about 3%.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) went against the tide, shedding 5%. South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) declined 4%.
Base metals
Copper was on the rise for most of the day, but then slid to US$2.82/pound in late afternoon, while Nickel retreated to US$8.62/pound. Zinc was steady at US$0.89/pound.
Base metals focused stocks rose, responding to increases in copper and nickel prices. Eurasian Natural Resources (LSE: ENRC) and Kazakhmys (LSE: KAZ) climbed 4% to take the lead in the sector. Xstrata (LSE: XTA) was close, gaining 3.8%. Vedanta Resources (LSE: VED), which just released a Q2 production update, Anglo American (LSE: AAL) and Antofagasta (LSE: ANTO) also added more than 3%.
The world’s largest miner BHP Billiton (LSE: BLT) added 1.7%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) rose marginally.
Cement operator Prosperity Mineral Holdings (AIM: PMHL) emerged as the leading riser among the juniors, gaining almost 6%. Indonesia operating coal miner Churchill Mining (AIM: CHL) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) followed, climbing 5% and 4%.
Mineral sands producer Kenmare Resources (LSE: KMR) and Philippines focused nickel and copper miner Metals Exploration (AIM: MTL) gained almost 3%.
Specialty minerals exploration and development company Thor Mining (AIM: THR) went against the tide, slipping 6.7%.
Banks, insurance, private equity
Partly nationalised bank Lloyds (LSE: LLOY) recouped some of its early losses on a reported cash call to end the day with marginal losses. Another bailed out bank Royal Bank of Scotland (LSE: RBS) declined 1.6%. Barclays (LSE: BARC) and HSBC (LSE: HSBA) were flat.
Standard Chartered (LSE: STAN) was the leading riser in the banking sector with a 3% climb.
Insurance companies also were mixed. Legal & General (LSE: LGEN) added 3% while Prudential (LSE: PRU) was up 1.8%. Friends Provident (LSE: FP) and Old Mutual (LSE: OML) rose marginally, as did Standard Life (LSE: SL).
Aviva (LSE: AV) and RSA Insurance Group (LSE: RSA) finished with marginal losses.
Small Cap Movers
Other notable movers among the small caps included investment company LonZim (AIM: LZM), which dipped 8.5%, while pharmaceutical company Sinclair Pharma (ALSE: SPH) shed 4.2%. Power generation plants manager IPSA Group (AIM: IPSA) climbed 4.5%.
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.
Hanson Westhouse issued a note on Nighthawk Energy PLC (AIM: HAWK) following yesterday’s full-year results, which showed higher revenues along with lower operational losses and costs for the period. Growth Equity and Company Research also retained its bullish stance on the company, upping its price target to 227 pence, which represents a substantial premium to the current price of 40 pence per share, a day after the company reported on its full year results.
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.
Milestone Group plc (AIM: MSG) announced it has entered into an agreement with privately owned American Technology firm, JumpStart Wireless Corporation. Milestone has obtained the right to sell patented and patent pending technologies of Jumpstart in the UK.
Australian Solomon Gold (TSX: SGA, AIM: SOLG) announced that the recently completed drilling program has recognised ‘excellent’ mineralogy. The programme was designed to evaluate the potential for an open-pit mining operation at Charivunga Gorge mineralization of the Gold Ridge project.
Stratic Energy Corp (TSX-V, AIM: SE) said it has started drilling operations at the Al Tayr-101 gas exploration well on the Jebel Nasrani prospect located in Block XVII of the Palmyride Basin, south west Syria.
