The FTSE 100 decined 0.2% today as a decline in US consumer confidence offset a batch of positive economic data that was released in the US today.
Today’s US retail sales data beat expectations, showing a 0.6% rise in September, complementing a 12 point improvement in the Empire State manufacturing index to 15.73, reflecting a higher level of manufacturing activity in the New York State.
However, the positive impact from these updates was offset by an unexpected decline in the University of Michigan consumer sentiment index, which dropped from 68.2 to 67.9 in October.
Analysts were expecting today’s preliminary reading to show an increase.
In his speech in Boston today, Fed chairman Ben Bernanke stated that the inflation rate should be double the current 1%, while the anticipated pace of economic growth in 2011 would not lead to a substantial decline in unemployment.
Bernanke’s comments were interpreted as a further sign that another round of quantitative easing from the Fed is likely to come this year.
Telecom group BT (LON:BT.A) and Royal Bank of Scotland (LON:RBS) led the blue chips with gains of 2.5%. Banking group Barclays (LON:BARC) climbed 2%. Hedge fund manager Man Group (LON:EMG) and insurance focused investor Resolution (LON:RSL) added 1.3%, while airline British Airways (LON:BAY), turbine manufacturer Rolls-Royce (LON:RR) rose 1%, as did specialty chemicals firm Johnson Matthey (LON:JMAT).
Insurer Old Mutual (LON:OML) was the heaviest faller in the FTSE 100 with a 5.5% loss. Sector peers RSA Insurance Group (LON:RSA) and Standard Life (LON:SL) dropped 3% and 2% respectively. Copper miner Kazakhmys (LON:KAZ), satellite telecommunications company Inmarsat (LON:ISAT) and software developer Autonomy Corp (LON:AU) lost about 2%.
US stocks were off to a flat start. The Dow Jones and S&P 500 indexes quickly pared early gains. Technology stocks did better as the NASDAQ composite climbed 0.5%.
Oil futures were on the rise today as the US dollar remained weak, while this week’s inventories reports suggested a higher level of demand in the US. However, this was not enough to break the firm resistance at the US$85/barrel level and the prices were still moving within the US$75-85/barrel range.
The US Energy Department said yesterday that crude oil stockpiles shed 416,000 barrels last week following a report from the American Petroleum Institute (API), which said that inventories in the US fell 4 million barrels.
The news provided a boost for the prices as analysts were expecting an increase of over a million barrels.
November Brent Crude rose to US$84.17/barrel, while US light, sweet crude for November delivery climbed to US$82.83/barrel.
BP (LON:BP) lost 1%, while fellow supermajor Shell (LON:RDSB) posted a small loss, as did BG Group (LON:BG).
Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) declined 1.7% and 1.2% respectively.
Oil and gas engineering firms followed with Amec (LON:AMEC) and Petrofac (LON:PFC) declining marginally.
Most midcaps were in the red. Salamander Energy (LON:SMDR) and Premier Oil (LON:PMO) declined 2.5% and 2% respectively, while Dragon Oil (LON:DGO) lost 1.7%. JKX Oil & Gas (LON:JKX) and Melrose Resources (LON:MRS) posted small losses.
Dana Petroleum (LON:DNX), Heritage Oil (LON:HOIL) and Soco International (LON:SIA) were little moved.
Wood Group (LON:WG) dropped 1.2%, while another services company Wellstream Holdings (LON:WSM) was flat.
European focused oil and gas exploration and production company Ascent Resources (LON:AST) rallied to emerge among the best performing small caps.
Gold, silver and platinum retreat
Gold pulled back as traders were taking profits following the latest record surge in the yellow metal.
Gold dropped to US$1,377/oz, while silver and platinum retreated to US$24.49/oz and US$1,699/oz respectively.
Major mining stocks were on the rise today. Gold producer Randgold Resources (LON:RRS) and African Barrick Gold (LON:ABG) posted small gains, as did silver miner Frensillo (LON:FRES) and platinum miner Lonmin (LON:LMI).
Midcaps followed the trend with gold miner Petropavlovsk (LON:POG) adding 1.6%, while silver producer Hochschild Mining (LON:HOC) tacked on almost 1%.
Aquarius Platinum (LON:AQP) went against the tide, shedding 3.3%.
Gold and copper focused explorer and developer Mariana Resources (LON:MARL) was among the top risers in the sector with an 11.5% gain. Solomon Islands and Australia operating copper and gold explorer Solomon Gold (LON:SOLG) and Latin America focused gold producer and exploration company Orosur Mining (LON:OMI) also did well, rising 7.5% and 6.5% respectively.
Base metals were headed in different directions. Copper climbed to US$3.82/lb, while nickel declined to US$10.97/lb and zinc held steady at US$1.078/lb.
Anglo American (LON:AAL) and Eurasian Natural Resources (LON:ENRC) posted small gains, while other base metal miners were in decline. Antofagasta (LON:ANTO), BHP Billiton (LON:BLT) and Vedanta Resources (LON:VED) posted small losses, as did Rio Tinto (LON:RIO). Kazakhmys (LON:KAZ) and Xstrata (LON:XTA) shed about 2%.
London’s only listed pure iron ore producer Ferrexpo (LON:FXPO) declined marginally.
Mozambique operating tantalum miner Noventa (LON:NVTA) and Turkey, the Philippines and Albania operating nickel miner European Nickel (LON:EK) led the small caps, surging 17% and 15% respectively.
Zinc producer ZincOx Resources (LON:ZOX) followed with an 8.5% advance.
Banks, insurers, private equity
Royal Bank of Scotland (LON:RBS) led the banks, adding 2.5%. Barclays (LONL:BARC) followed with a 2% gain. Lloyds (LON:LLOY) rose 1%, while Standard Chartered (LON:STAN) gained less than 1%.
HSBC (LON:HSBA) posted a small loss.
Most insurers were in decline today. Old Mutual (LON:OML) was at the bottom of the pile with a 5.5% loss.
RSA Insurance Group (LON:RSA) and Standard Life (LON:SL) dropped 3% and 2% respectively.
Admiral Group (LON:ADM) and Legal & General (LON:LGEN) declined marginally.
Aviva (LON:AV) went against the tide, posting a small gain.
Prudential (LON:PRU) was little moved.
Private equity group 3i (LON:III) declined marginally.
Small Cap Movers
Other notable movers among the small caps included Africa focused investor Lonrho (LON:LONR), which rose 7%.
Small Cap News
BioNeutral Group (OTCBB:BONU) said it has developed a new antimicrobial technology platform that kills bacteria quickly and efficiently, designed specifically for industrial uses.
Mariana Resources (LON:MARL) said this morning it has struck bonanza grades of gold and silver at its project in Patagonia. The company says there is potential for high-grade gold mineralization along the 450 metre strike vein-breccia trend at Calandria Norte, part of the Las Calandrias area in Santa Cruz Province, Argentina.
Biocompatibles (LON:BII) said its German partner Merz still hasn’t decided when to re-start sales of facial filler Novabel. The product, developed by BII, was withdrawn in June when a small number of patients reported an adverse reaction to the treatment. Merz has made strides in developing a reversing agent and remains committed to re-introducing Novabel.
The newly enlarged Motive Television (LON:MTV) has begun trading on AIM after its reverse takeover of AdecqDigital and a £4.75 million fundraising. With the acquisition, the company is targeting an emerging technology market with a new product range.
Niger Uranium (LON:URU) has begun exploration drilling on its In Gall and Irhazer uranium licenses in Niger. The programme will evaluate three uranium targets at an estimated cost of US$650,000.
Shares in Desire Petroleum (LON:DES) plunged 25% after the 14/15-1 well on the Rachel prospect became the latest in the Falklands to come up dry. The well reached a total depth of 2,877 metres and initial wireline logging showed that no hydrocarbons were found. However, a substantial thickness of sandstone was encountered in the upper part of the target zone.
Shares in multimedia producer Ten Alps (LON:TAL) took a beating after the group announced the UK Department for Education has terminated its Teachers TV project with effect from 29 April 2011.
Synchronica (LON:SYNC, TSX-V:SYN) has received the relevant counter-signatures and purchase orders from a pan-African operator group, with the launch of its Mobile Gateway product expected shortly.
Sefton Resources' (LON:SER) shares advanced to trade around 9% in late morning deals after it revealed positive results from its steam-based production enhancement programme in California.
The next year should be one of massive transformation for the technology firm Seeing Machines (LON:SEE). Analysts expect its sales to more than double in that period, which means the group will be cash generative and profitable.
U.S. Oil and Gas Plc (PLUS:USOP) shares shot up 75% in early trading, after geochemical tests confirmed the presence of five hydrocarbon reservoirs at the Hot Creek Valley property in Nevada.