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Oil, Gold and Silver prices recover, miners and energy stocks lead FTSE 100 rebound

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Overview: Early dealings produced some encouraging results for the London Stock Exchange’s blue chips, as no FTSE 100 constituent lost more than 2%, while miners and some financial stocks performed very well, helping the top tier index to an almost 50 point hike to erase the losses it suffered over the past two days and climb back over the 4,900 barrier.

Wall Street also established some momentum for the Footsie after the Dow Jones industrial average closed over 30 points up on Thursday after dipping in early trade. US markets appear to be in for more gains on Friday as US stock index futures were up 0.2% to 0.4%.

Key movers: in the black

Partly nationalised major banking group Lloyds (LSE: LLOY) is reportedly searching for ways to avoid joining the government’s asset protection scheme, looking at alternatives including initial public offering or sale of its fund management asset Scottish Widows. The speculation helped Lloyds to a 4.4% advance.

Shares in Kazakhmys (LSE: KAZ), which made gains yesterday on the back of a better than expected set of interims as the rest of the sector plunged, found itself atop of the leaderboard today with a 5.2% surge. Precious metals producers also did well as platinum miner Lonmin (LSE: LMI) and Randgold Resources (LSE: RRS) followed with gains of 4.3% and 3.6% respectively.

Heating and construction materials supplier Wolseley (LSE: WOS) was among yesterday’s notable newsmakers, saying it secured a three year contract extension from Greenstar UK, which has helped it to increases in recycling rate and saved it 20% of waste-related costs since 2006. The company climbed 3.2% in midmorning trade.

Key movers: in the red

Medical devices manufacturer Smith & Nephew (LSE: SN) showed up among the top fallers after leading the blue chips yesterday on the back of a Financial Times report, which said sales in the sector would likely get a boost form the ageing baby boomer generation. Defence and aerospace systems maker BAE Systems (LSE: BA) shed a further 1.1% following the loss of a US$ billion deal with the US government, which was announced yesterday.

Support services provider Serco Group (LSE: SRP) was in the lead, correcting almost 2% after shares hiked following the release of its interim report on Wednesday, marking a 33% pre-tax profit rise and reaffirming 2009 guidance.

Another one of yesterday’s leaders engineering firm Amec (LSE: AMEC) also corrected, dropping a little over 1%.

Commodities

Oil recovered from recent declines following strong gains which helped the prices to 10 month highs.
US light crude climbed to US$72.5/barrel, while Brent Crude reached US$72.6/barrel.

With only a few exceptions, key energy stocks were responsive to the price changes.

BP (LSE: BP) added 1.4%, while fellow supermajor Shell (LSE: RDSB) rose less than 1%. BG Group (LSE: BG), however, slipped into the negative in early trade. Petrofac (LSE: PFC) added almost 2%, while another FTSE 100 constituent Cairn Energy (LSE: CNE) made gains of less than 1%. Tullow Oil (LSE: TLW) climbed about 1.5%.

Midcaps Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) went against the tide after releasing their interims today, each slipping over 3%.

Another FTSE 2500 energy producer Dragon Oil (LSE: DGO) fared better, upping its value almost 1% to 380p per share.

The more volatile juniors were mostly flat.

Europe focused oil and gas developer Ascent Resources (AIM: AST) outperformed its peers with a 12% rally, while Northern Petroleum (AIM: NOP), which released an operational update today, followed with a 5% climb.

Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and Latin American focused Gold Oil (AIM: GOO) both slumped 8.4% and 6.6%.

Precious metals miners off to good start as prices climb

Metal prices were on the rise owing to the positive recovery sentiment.
Gold surged back over US$950/ounce, while Silver rose to US$14.46/ounce. Platinum improved to US$1,238/ounce.

Major miners basked in the sun.

Platinum miners led the group as FTSE 100 constituent Lonmin (LSE: LMI) rose 3.7%, while midcap Aquarius Platinum (LSE: AQP) impressed with a 6.2% climb.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) improved 1.2% to 1,436p per share. Blue chip gold producer Randgold Resources (LSE: RRS) and fellow previous metal miner from FTSE 250 Peter Hambro Mining (LSE: POG) both climbed over 3%.

Silver miner Fresnillo (LSE: FRES) added 1.9% and midcap Hochschild Mining (LSE: HOC) was up 3.1%.

Juniors didn’t show much movement in early dealings with only a few exceptions. Turkey focused gold explorer Stratex International (AIM: STI) surged almost 14%. Oxus Gold (AIM: OXS) continued its upward trajectory, climbing 8%.

Base metals miners gain

Base metal prices also improved. Copper moved up to US$2.92/pound, while Nickel extended yesterday’s gains, climbing to US$8.85/pound and Zinc reached US$0.83/pound.

Major miners performed well in the morning, bolstered by higher prices.

Copper miner Kazakhmys added 4.6% off the back of yesterday’s interim report. Xstrata (LSE: XTA) almost caught up with the leaders, advancing 3.9%. Another copper producer Antofagasta (LSE ANTO) added 3% in sympathy. Copper juniors also benefited from higher copper prices. Discovery Metals (AIM: DME, ASX: DML) climbed 7%, while EMED Mining (AIM: EMED) rose 4%. Gold and copper developer and producer Frontier Mining (AIM: FML) followed with a 5% gain.

World’s largest miner BHP Billiton (LSE: BLT) rose 1.8% to 1,631p per share. Rio Tinto (LSE: RIO), Vedanta Resources (LSE: VED) and Anglo American (LSE: AAL) all added about 2%.

Coking and thermal coal producer New World Resources (LSE: NWR) outperformed many of its peers, rising 5%, as did London’s only pure iron ore producer, Ferrexpo (LSE: FXPO) which climbed 4%.

Aside from a small group of notable fallers, juniors mostly held steady. Nickel juniors gave back some of yesterday’s strong gains. Regency Mines (AIM: RGM) dipped 15.5%, while laterite nickel specialist European Nickel (AIM: ENK) slipped 12%.

Coal miner Strategic Natural Resources (AIM: SNR) moved south 8.7% on the back after the company reported no additional information on a recent statement from Atlantic Coal, which said it was considering an offer for the company at 15 pence per share.

Banks, insurance, private equity

Financial stocks performed well on Friday morning.

Patrly nationalised banking groups Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) advanced 4.5% and 2.5% respectively. Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) followed with a 2% improvement, but HSBC (LSE: HSBA) was flat.
Insurers also got off to a good start.

Legal & General (LSE: LGEN), Prudential (LSE: PRU) and Aviva (LSE: AV) all climbed about 1.5%. Friends Provident Group (LSE: FP) was up 1.7%. Old Mutual (LSE: OML), Standard Life (LSE: SL) also were in the black, but didn’t add much.

Large and Mid Cap News

FTSE 250 oil producer Dana Petroleum (LSE: DNX) took its turn to lament the deteriorating conditions in the commodity market today, reporting a substantial drop in pre-tax profits, while revenues halved.

Small Cap News

Finders Resources (AIM: FND) has raised $20 million via a private placement of shares at 33 cents per share. Shareholders in Finders, will now be offered the opportunity to acquire additional shares via a share purchase plan at the same price, of 33 cents.

Investor’s liked what they heard from Ascent Resources (AIM: AST) this morning, pushing shares in the company nearly 20% higher after the company reported positive results from the Görbeháza-1 well (‘GH-1’) which is located in Panhandle region of the Nyírség North Permit in north-east Hungary.

AIM and ASX listed Australian coking coal producer, Caledon Resources (ASX: CCD; AIM: CDN) has pared losses for the six months to 30 June 2009. Revenues increased from A$30.4 million to A$39.6 million for the six months to June 30, 2009.

Shares in UK-based junior oil and gas producer Northern Petroleum (AIM: NOP) surged over 7.5% today after the company released an operational update from its Grolloo field in the Netherlands, which has recently been hydraulically fractured.

Junior gold producer, Minera IRL (AIM: MIRL), reported in line results for the six months ended 30 June 2009.   Gold production of 14,903 ounces generated revenues of US$13.3 million, EBITDA of $4.1 million and profit before tax of US$1.2 million.

London-based Strategic Natural Resources PLC (AIM: ANRP) released its full year results today, reporting earnings resulting from the sale of a 26% stake in its core South African asset Elitheni Coal Limited.

Asian Citrus (AIM: ACHL), China’s largest orange producer and largest orange plantation owner, announced that it would be applying to list the company on the main board of the Hong Kong Stock Exchange. Shares in Asian Citrus jumped 10% on the statement.

Gold miner Metals Exploration AIM: MTL), which is developing a large gold deposit in the Philippines, released its interim financial statement saying that Solomon Capital has increased its shareholding in the company, helping it raise funds for the ongoing feasibility study and exploration drilling at its Runruno project.

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July 31 2012

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