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Randgold, Fresnillo and Lonmin rise as Gold, Silver and Platinum climb to boost FTSE 100

23rd Oct 2009, 12:21 pm Randgold, Fresnillo and Lonmin rise as Gold, Silver and Platinum climb to boost FTSE 100

Overview: the UK market was looking to ride the momentum established by yesterday’s surge on Wall Street, driven by strong Q3 results from McDonalds (NYSE: MCD), 3M (NYSE: MMM) and AT&T (NYSE: T) and later insurer Travelers (NYSE: TVR), Amazon (NYSE: AMZN) and bank PNC Financial (NYSE: PNC). The FTSE 100 expectedly gained 1% in early trade despite a steeper than expected quarterly contraction of the UK GDP, which declined 0.4% instead of the expected 0.2% quarter on quarter growth.

Stock index futures in the US pointed to a slightly higher start with the Dow Jones average projected to increase about 0.2%, with the same expectations set for the tech focused Nasdaq composite and S&P 500. Investors are waiting for quarterly results from Microsoft (NYSE: MSFT), Honeywell (NYSE: HON), Fortune Brands (NYSE: FO) and Whirlpool (NYSE: WHR), which are due today as well as home sales data for September.

Engineering firm Invensys (LSE: ISYS) led the FTSE 100 with a 4.5% increase following a contract win in Brazil. Telecom company Inmarsat (LSE: ISAT) and clothing retailer Next (LSE: NXT) also made it to the leaderboard with gains of over 3.5%. Cruise ship operator Carnival (LSE: CCL) added 3.3%.

Only a few blue chips lost more than 1%. Telecom company BT Group (LSE: BT) was at the bottom of the pile with a 2% slide, while private equity group 3i (LSE: III) and distribution group Bunzl (LSE: BNZL) lost more than 1%.

Commodities

Oil prices have improved over yesterday’s levels. December Brent Crude rose to US$79.61/barrel, while US light, sweet crude for December delivery rose to US$81.20/barrel.

All oil and gas stocks were in the black, responding to the positive movements in the stock markets and the increase in oil prices.

BG Group (LSE: BG) was in the lead with a 1.6% gain, while Cairn Energy (LSE: CNE) was up 1%. Shell (LSE: RDSB) also gained 1%, while fellow supermajor BP (LSE: BP) tacked on less than 1%, as did Tullow Oil (LSE: TLW) and Petrofac (LSE: PFC).

Midcaps also did well as Dana Petroleum (LSE: DNX) rose 1%, while Dragon Oil (LSE: DGO) and Heritage Oil (LSE: HOIL) both posted small gains.

Juniors didn’t show much movement this morning. Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) led the sector with an 8% gain. North Sea explorers Xcite Energy (AIM: XEL) followed with a 5% advance, while Europe focused oil and gas developer Ascent Resources (AIM: AST) added 3%.

Energy investor Xtract Energy PLC (AIM: XTR) did well, adding 8% in the afternoon.

Precious metals

Metal prices also increased with Gold reaching US$1,060/oz and Silver rising to US$17.68/oz. Platinum improved to US$1,365/oz.

Platinum miner Lonmin (LSE: LMI) was the top performer in the market with a 2.2% climb. Silver producer Fresnillo (LSE: FRES) followed with a gain of 1.7%, while gold producer Randgold Resources (LSE: RRS) rose marginally.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) added 1.7%.

Aquarius Platinum (LSE: AQP) led the sector in the FTSE 250 with a 2% climb. Silver producer Hochschild Mining (LSE: HOC) started the day with marginal gains, while gold miner Petropavlovsk (LSE: POG) rose 1.7%.

Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) led the juniors with a 6.8% rise, while Philippines focused gold producer Medusa Mining (AIM&ASX: MML) tacked on 4.3%.

Commodity asset development company Mercator Gold (AIM: MCR) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) went in the opposite direction, shedding 3.8% and 2.8% respectively.

Base metals

Copper and Nickel were on the rise, reaching US$3/pound and US$8.73/pound respectively. Zinc advanced to US$1.02/pound.

Mining stocks were in demand today as all blue chip companies in the sector posted good gains.

Anglo American (LSE: AAL), Kazakhmys (LSE: KAZ), Xstrata (LSE: XTA) and Vedanta Resources (LSE: VED) were in the lead with all tacking on more than 3%.

Rio Tinto (LSE: RIO) and BHP Billiton (LSE: BLT) were close with gains of over 2.5%. Eurasian Natural Resources (LSE: ENRC) gained 2%, while Antofagasta (LSE: ANTO) was up 1%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, advancing 2.3%.

Botswana operating nickel and copper miner Discovery Metals (AIM: DME) emerged as the leading faller among the juniors, declining 8% after raising A$13.1 million. South American focused junior miner Herencia Resources (AIM: HER) and Tunisia focused metal miner Maghreb Minerals (AIM: MMS) followed with losses of 6% and 5% respectively.

Banks, insurance, private equity

Financial stocks were doing well following positive reports from PNC Financial (NYSE: PNC) and Travelers (NYSE: TRV) in the US. Baoiled out banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were in the lead with gains of 2.8%, while Standard Chartered (LSE: STAN) was up 2%. Barclays (LSE: BARC) and HSBC (LSE: HSBA) gained 1.4% and 1.7% respectively.

Prudential (LSE: PRU) led the insurers with a 3.3% climb, while Old Mutual (LSE: OML) and Standard Life (LSE: SL) both added 1.2%. Aviva (LSE: AV) rose marginally, while Legal & General (LSE: LGEN) was flat.

Friends Provident (LSE: FP) and RSA Insurance Group (LSE: RSA) went against the tide, posting marginal gains.
Private equity group 3i (LSE: III) lost 1.2%.

Small Cap Movers

Other notable movers among the small caps included Developer of CAD and image analysis software Medicsight (AIM: MDST) with an 8% slide and biotechnology company Plant Impact (AIM: PIM), which rose 3%.

Large and Mid Cap News

Textile maintenance business and FTSE 250 constituent Davis Service Group (LSE: DVSG) said trading in the period since 1 July has been in line with the first half of the year with the group’s revenue slightly ahead of the nine months to 30 September 2008, while profits were at about the same level.

Filtrona plc (LSE: FLTR) released its Interim Management Statement for the third quarter and were marginally ahead of the expectations. Third quarter Company revenue was up 3.8% on a like-for-like basis and 4.9% higher for the cumulative three quarters of 2009. Investors have responded positively to the update, pushing shares in the company 5% higher.

Balfour Beatty plc (LSE: BBY) announced it had received valid acceptances in respect of approximately 97% of the total number of New Shares offered to Shareholders in its 3 for 7 Rights Issue. The Rights Issue was fully underwritten by RBS Hoare Govett, J.P. Morgan and Citigroup.

Financial services group and FTSE 250 constituent Provident Financial (LSE: PFG) sees little chance of improvement in the job market until next spring, intending to maintain its cautious approach to lending, which has helped it remain profitable during the economic downturn, which is expected to carry on for the rest of the year.

Brit Insurance Holdings (LSE: BRE) released its following Interim Management Statement and trading update for the first three quarters of the calendar year. Brit Insurance reported a 19% increase in gross written premiums to approximately £1.3 billion, while renewal premiums also increased 4.8%.

Shares in Hardy Oil and Gas (LSE: HDY) plummeted over 35% after the India focused oil and gas exploration and production company hit a dry well in an attempt to explore the Middle and Lower Miocene target levels at the D9 block in the Krishna Godavari basin in India.

Invensys (LSE: ISYS) announced that its railway subsidiary, won a ‘milestone’ contract to upgrade the signalling and automatic train control on São Paulo's rapidly developing Metro system. The deal between Invensys Rail, Brazilian engineering company Montagens e Projetos Especiais (MPE) and Spanish telecoms specialists Infoglobal is worth £255 million.

British Sky Broadcasting Group PLC (LSE: BSY) released their latest quarterly trading update, which revealed double digit revenue growth as its HD, Broadband and telephone services experience increased demand. In the quarter, Sky sold over a million subscription products, an increase of more than 70% year on year.

Small Cap News

Cape PLC (AIM: CIU), a provider of industrial services to the energy and natural resources sectors, announced three contract renewals in the UK with a combined value in excess of £25 million.

Agriterra (AIM: AGTA) has secured more funds for the expansion of its cattle ranching and feedlot production business in Mozambique via an equity placing, raising US$5.1 million.

Mobile email and data synchronisation group Synchronica PLC (AIM: SYNC) announced a purchase order worth US$101,400 from a North-African mobile operator for installation of its mobile email product Mobile Gateway and an initial 10,000 user licence as well as a contract for ongoing professional services.

LXB Retail Properties PLC (AIM: LXB) said it has successfully completed its Initial Public Offering and that it has started trading on AIM and the Channel Islands Stock Exchange under the ‘LXB’ symbol as of today, October 23 2009. Shares were trading at 104 pence in early deals.

HandMade plc (AIM: HMF) announced it will create a children’s division through a proposed joint venture with National Geographic Kids. The Joint Venture will acquire the New York based Animation Collective Group, and the joint venture intends to develop a number of productions based upon the intellectual property of the Duchess of York, Sarah Ferguson.

Development company Coal of Africa (ASX/AIM/JSE: CZA) has issued shares to Shangoni Bezwe Management Services to snag a 6% interest in Limpopo Coal. The company has issued 1,990,000 fully paid ordinary shares at a deemed issue price of 34 pence to Shangoni Bezwe.

Broker Religare Hichens Harrison issued a note on Plant Impact (AIM: PIM) following the news that the novel pesticides and plant nutritional products developer secured a €1 million grant from the EU to support the development of its nematicide, aimed at eliminating parasitic roundworms known as nematodes.

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