London pre open: the FTSE 100 is projected to be off to gains in early trade after Wall Street rose on Obama’s yesterday’s speech in which he set out a plan to avoid another financial crisis and proposed a reform for the banking system. Energy stocks are likely to be bolstered by BG Group (LSE: BG), which announced another discovery in Brazil this morning. Oil prices remained unchanged form yesterday’s levels, while base metals inched higher.
The FTSE 100 managed to stay on positive ground on Monday, while global stock markets were mixed. Hong Kong stocks declined, but US stocks closed higher with the Dow Jones industrial average gaining about 0.2% and the Standard & Poor’s 500 tacking on 4 points after a strong session from utilities, materials and industrials following Barack Obama’s speech in which he proposed a regulatory reform for the banking system and set out a four-point plan to prevent another financial crisis from kicking in.
Japan’s Nikkei average also finished the day with small gains after a mixed session, lifted by exporters as the yen’s rate to the US dollar. Chinese stocks also made small gains.
Oil prices were roughly at the same level as in the late afternoon yesterday as US light crude stood at US$68.9/barrel and Brent Crude still was at US$67.1/barrel. At the same time, precious metals declined as Gold was just short of the US$1,000/oz mark, while Platinum moved down to US$1,307/oz. However, Silver added a few cents, rising to US$16.57/oz. Base metals showed a little improvement with Copper rising to US$2.79/pound, Nickel climbing to US$7.59/pound, while Zinc held steady at US$0.83/pound.
This morning was slow in terms of news as oinly a few blue chip companies released updates before trading started. BG Group (LSE: BG), which recently surged on an operational update from its Guara discovery, saying it could contain reserves of up to 2 billion barrels, announced a new discovery in the Santos Basin area offshore Brazil, saying its Abare West well, located about 50 kilometres west of the Guara discovery proved the presence of an accumulation of oil and natural gas in a separate structure within an evaluation area which encompasses the company’s other discoveries Iguacu and Carioca as well as Guara.
In the FTSE 250, department stores group Debenhams (LSE: DEB) released a trading update, saying like-for-like sales declined 3.8% in the first half doe to the largest space moves in Debenhams’ history, which will result in some 530,000 square feet of trading space being converted from concessions to own bought ranges with introduction of new brands and departments.
Homewares retailer Dunelm Group (LSE: DNLM) presented its final results today, reporting increases in revenues, profits and earnings per share while like-for-likes slid 0.5%.
Investment manager Ashmore Group (LSE: ASHM) said its full year profits declined 19%, while revenues slipped 15% in its preliminary results released today.
Finally, independent oil and gas producer Salamander Group (LSE: SMDR) announced the spudding of the Si That-3 appraisal well in Khorat Basin in northeast Thailand.
Junior oil and gas developer Ascent Resources (AIM: AST) was the leading riser in the AIM this morning after announcing its Hungarian subsidiary completed the testing of the PEN-105 gas well in eastern Hungary, achieving substantially higher gas rates than projected by pre-drill estimates. The company was up 41% on the news.