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Gold and Silver recover, but Randgold, Lonmin and Fresnillo fall, FTSE 100 holds on

21st Oct 2009, 4:44 pm Gold and Silver recover, but Randgold, Lonmin and Fresnillo fall, FTSE 100 holds on

Overview: Morgan Stanley (NYSE: MS) became the latest company to beat market expectations with a strong set of Q3 results, snapping a three quarter losing streak with a surprising US$757 million profit. Yahoo (NASDAQ: YHOO) also had a good quarter with its profits tripling to US187 million following a cost cutting campaign as was revealed in the report released in pre-trade.

Buoyed by another string of positive Q3 reports, Wall Street surged in early trade with the Dow Jones industrial average climbing 0.5%, while the Nasdaq composite rallied 1%.

The rise in the US gave a boost to the FTSE 100, which was in decline for the better part of the day. The UK blue chip index quickly recouped today’s losses and returned to the opening level.

Plumbing and heating materials supplier Wolseley (LSE: WOS) emerged atop the leaderboard with a 3.7% climb following an upgrade from Bank of America Merrill Lynch, which raised it to “buy” from “underperform.”

Supermarket chain Tesco (LSE: TSCO) also did well, tacking on 2.7% after broker Nomura upper its price target to 526 pence from 405 pence. Car insurer Admiral Group (LSE: ADM) and broker ICAP (LSE: IAP) also made it to the leaderboard with gains of 3.4% and 3.3%.

Technology firm Smiths Group (LSE: SMIN), defence contractor BAE Systems (LSE: BA) and broadcaster BSkyB (LSE: BSY), which are all trading ex-dividend today, led the fallers with losses of 3.5%, 2.8% and 2.2% respectively.

Infrastructure software manufacturer Autonomy Corporation (LSE: AU) and marketing group WPP Group (LSE: WPP) also were in selling mode, shedding about 2.5%.

Commodities

Oil prices climbed, getting help from the surge in the markets.

December Brent Crude improved to US$77.12/barrel, while US light, sweet crude for December delivery was just short of US$79/barrel.

The increase in oil prices helped most oil and gas stocks trim their early losses and even helped some companies to gains. Petrofac (LSE: PFC) tacked on almost 1%, while Tullow Oil (LSE: TLW) rose marginally.

Supermajors BP (LSE: BP) and Shell (LSE: RDSB) posted marginal losses, while Cairn Energy (LSE: CNE) slid 1.5%. BG Group (LSE: BG) lost 2%, moving down to 1,133 pence per share.

Oil & gas juniors were mixed.

Energy investor Xtract Energy PLC (AIM: XTR) was in the lead with a 4.3% climb. US focused junior Empyrean Energy (AIM: EME) and Kazakhstan operating Max Petroleum (LSE: MXP) gains almost 3%.

Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) gave back its recent gains, shedding 6.7%. North Sea explorers Xcite Energy (AIM: XEL) and North American based explorer Nighthawk Energy (AIM: HAWK) followed wit losses of over 4.5%.

Europe focused oil and gas developer Ascent Resources (AIM: AST) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) were down 3%.

Precious metals

Gold and Silver showed some improvement after falling early in the day. The yellow metal climbed back to US$1,055/oz, while Silver reached US$17.57/oz. Platinum improved to US$1,353/oz.

The rising prices, however, fell short of bringing the mining sector back into the black. Platinum miner Lonmin (LSE: LMI) was at the bottom of the pile with a 2.3% decline. Gold miner Randgold Resources (LSE: RRS) declined marginally, as did silver producer Fresnillo (LSE: FRES).

Specialty chemicals firm Johnson Matthey (LSE: JMAT) was sitting just below the opening level. Yamana Gold (LSE: YAU) dropped 2.5%.

Midcaps also were in the negative. Gold miner Petropavlovsk (LSE: POG) declined 1.6%, while silver producer Hochschild Mining (LSE: HOC) lost 1.3%. Aquarius Platinum (LSE: AQP) was the leading faller in the sector in the FTSE 250 with a 2% loss.

Philippines focused Metals Exploration (AIM: MML) led the sector with a 7% climb. African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) followed with a 3.5% gain.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Latin American precious metal miner Minera IRL (AIM: MIRL) led the fallers, dipping 8% and 7% respectively. Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) and London listed Australian gold producer Leyshon Resources (AIM: LRL) followed with 5% declines.

South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) both lost 4%.

UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG), Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) and Commodity asset development company Mercator Gold (AIM: MCR) all shed more than 3%.

Base metals

Buoyed by the late market rally, Copper and Nickel quickly recovered, rising to US$2.91/pound and US$8.65/pound respectively, while Zinc rose to US$0.97/pound.

Antofagasta (LSE: ANTO) led the sector with a 1.8% gain. Eurasian Natural Resources (LSE: ENRC) and Rio Tinto (LSE: RIO) rose marginally. Anglo American (LSE: AAL), BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) lost less than 1%, while Vedanta Resources (LSE: VED) declined 1.3%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, dropping 1.4%.

Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) and South American focused junior miner Herencia Resources (AIM: HER) outperformed the sector with both gaining over 6%.

Diversified miner Finders Resources (AIM, ASX: FND) went in the opposite direction, shedding 7% to emerge among the top fallers in the sector. Cement operator Prosperity Mineral Holdings (AIM: PMHL) was down 6%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) lost 5%.

Russia focused nickel and copper miner Amur Minerals (AIM: AMC), Indonesia operating coal miner Churchill Mining (AIM: CHL) and nickel and iron ore exploration junior Landore Resources (AIM: LND) all lost 3%.

Banks, insurance, private equity

Royal Bank of Scotland (LSE: RBS) was the worst performer in the group with a 1.5% loss. Fellow bailed out bank Lloyds (LSE: LLOY) added less than 1%, as did HSBC (LSE: HSBA).

Barclays (LSE: BARC) declined marginally, while Standard Chartered (LSE: STAN) climbed 1.6%.

Insurers didn’t show much movement today. Standard Life (LSE: SL) was in the lead with a 2.5% climb. Old Mutual (LSE: OML) gained 1%, while Legal & General (LSE: LGEN) and Aviva (LSE: AV) rose marginally. Prudential (LSE: PRU) lost 1%, while Friends Provident (LSE: FP) and RSA Insurance Group (LSE: RSA) posted small losses.

Private equity group 3i (LSE: III) gained less than 1%.

Large and Mid Cap News

A rebound in demand from Chinese steel mills has boosted BHP Billiton (LSE: BLT, ASX: BHP) to a record September quarter in iron ore production. BHP's iron ore production was one per cent higher, at 30 million tonnes on the same time last year.  However, the real gain was the 11 per cent jump on June quarter production.

Home Retail Group (LSE: HOME) announced its half year results, the statement reveals that the UK based retail group remained competitive and increased its market share at its primary stores. During period, the trading performance at both Argos and Homebase has exceeded management expectations.

UK airport operator BAA, which is a subsidiary of Grupo Ferrovial (IBEX: FER), has reached an agreement to sell London’s Gatwick airport to Global Infrastructure Partnership for £1.51bn. The transaction is expected to be completed on 3 December 2009.

This morning Asia focused, mid-tier oil & gas producer Salamander Energy plc (LSE: SMDR) and AIM’s Serica Energy (AIM & TSX: SQZ) are preparing to restart production from their Kambuna gas field joint venture offshore North Sumatra. Production at the Kambuna field has been temporarily suspended over the past month.

Small Cap News

The cutting edge, Greenland-focused mining operator, Angel Mining Plc (LSE: ANGM) announced today the payment of a final instalment of $500,000 to Crew Gold Corporation for Nalunaq gold mine in Greenland. The payment was made after the Government of Greenland approved the transfer of ownership.

Brisbane-based resources company Discovery Metals (ASX: DML, AIM: DME) has requested a trading halt on the Australian Stock Exchange pending the release of an announcement regarding a material capital raising.  It is standard practice for ASX listed companies to have trading suspened ahead of a capital raising.  In London, shares in Discovery Metals held steady at 30.5 pence.

Cashbox (AIM: CBOX) announced that it has negotiated a two year agreement to advertise China Unionpay, a Chinese Card Scheme with over 1.8bn card holders, on its ATM machines.

Diamond miner with assets in Sierra Leone and Guinea West African Diamonds (WAD, AIM: WAD) has reported an initial diamond production at its Bomboko mine in Guinea and said it was looking to take advantage of growth opportunities in the market by growing business through acquisitions.

StatPro Group PLC (AIM: SOG), provider of portfolio analytics and data software for the asset management industry, said trading for the nine months ended September 30 2009 was in line with the directors' expectations and ahead of the comparable period in 2008.

China based travel services group, Et-china (AIM: ETC) announced record trading performance during China’s Golden Week holiday at its package tour provider, GTL.

Copper and gold miner EMED Mining (AIM: EMED) retained the ‘buy’ recommendation from broker Fox-Davies Capital, which also left its target price for the company unchanged at £0.45 pence following EMED’s statement today summing up the history and potential of its operations in Slovakia, where it plans to initiate permitting submissions for its Biely Vrch project in the next six months and commence development in 2012.

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