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US futures rise to signal higher start on Wall Street, lift FTSE 100

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Overview: the FTSE 100 quickly recovered from Monday’s losses thanks to higher oil and metal prices, which boosted the mining and energy sectors. The blue chip index tacked on almost 50 points by midday. US futures also rose, signaling a higher start on Wall Street to further boost the Footsie.

Tuesday has been slow in terms of news as no large or mid caps released any significant updates and the stock movements were primarily based on changes in commodity prices and trends in other global markets.

The leaderboard was expectedly flooded with miners, while tour operators also did well with Carnival Corporation (LSE: CCL) and TUI Travel (LSE: TT) gaining 4.2% and 3.7% respectively. Oil and gas services company Amec (LSE: AMEC) also made it to the top with a 3.2% gain.

Miner Eurasian Natural Resources (LSE: ENRC) rallied 5.8% to lead the sector and the FTSE 100, while Fresnillo (LSE: FRES), Lonmin (LSE: LMI) and Rio Tinto (OLSE: RIO) followed, advancing 5.6%,  4.1% and 3.9% respectively.

The fallers were led by defensive stocks, primarily utility companies, and retailers. United Utilities (LSE: UU) and sector peer Severn Trent (LSE: SVT) led the pack, dipping 2.6% and 2.5%. Supermarket chains Sainsbury (LSE: SBRY) and Morrisons (LSE: MRW) followed with losses of 1.4% and 1% respectively. Airline British Airways (LSE: BAY) also declined 1%.

Commodities

Oil prices showed some improvement today after falling overnight on disappointing new from China, where oil consumption decreased 5.4% month on month in August. Brent Crude rose to 2.2% to US$69.2/barrel, while benchmark crude for October delivery improved to US$70.9/barrel.

Supermajors BP (LSE: BP) and Shell (LSE: RDSB) showed some movement in early trade, rising 1.7% and 1% respectively. BG Group (LSE: BG) recouped yesterday’s losses, advancing about 2% to 1,136 pence per share. Tullow Oil (LSE: TLW) also rose, adding 1.8%. Other FTSE 100 constituents Petrofac (LSE: PFC) and Cairn Energy (LSE: CNE) took about the same path, rising 1.3% and 1.6% respectively.

Mid caps were mixed. Heritage Oil (LSE: HOIL) slid 1.6%, while fellow FTSE 250 constituent Dana Petroleum (LSE: DNX) was the top performer among major oil and gas stocks with a 2.2% climb. Dragon Oil (LSE: DGO) rose marginally.

Most juniors were in selling mode this morning. Eastern European focused junior Aurelian Oil & Gas (AIM: AUL) was the leading faller, plummeting 33% after reporting disappointing results from its Voitinel-1 well in Romania, failing to hit oil, but finding gas shows above the targeted area.

US focused Empyrean Energy (AIM: EME) and Latin American focused Gold Oil (AIM: GOO) shed over 5%, while Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) lost over 4%.

Mining stocks surge on higher prices

Metals prices improved today following yesterday’s declines. Gold surged back to US$1,017/oz, while Silver rose to US$17.26/oz and Platinum reached US$1,331/oz.

Mining stocks were in good shape following a recovery in metals prices after yesterday’s declines.

FTSE 100 constituents silver producer Fresnillo (LSE: FRES) and platinum miner Lonmin (LSE: LMI) both added over 4%, while blue chip gold miner Randgold Resources (LSE: RRS) rose 3%. Mid caps also did well with the exception of Aquarius Platinum (LSE: AQP), which posted marginal gains. FTSE Silver producer Hochschild Mining (LSE: HOC) climbed 2.6%, while fellow FTSE 250 constituent gold miner Peter Hambro Mining (LSE: POG) rose 4.6%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved up 2.5%.

London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a 30% rally after selling its Chinese Zheng Guang project. Africa operating gold miner GMA Resources (AIM: GMA) followed with a 25% surge.

Another African focused junior Cluff Gold (AIM: CLF) also for off to a good start, tacking on 6%. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) rose 4.3%.

Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) added 7%.

Turkey focused gold miner Ariana Resources (AIM: AAU) headed in a different direction, slipping 12%. Platmin (TSX, AIM: PPN) shed over 4%.

Copper and nickel rise to boost miners

Base metals also rose. Copper reached US$2.84/pound, Nickel was at US$7.94/pound and Zinc climbed to US$0.87/pound.

Major base metals miners all rose this morning. Rio Tinto (LSE: RIO) was in the lead after announcing the sale of Alcan Composites to Schweiter for US$349 million. The company was up 3.6%. Vedanta Resources (LSE: VED) and Xstrata (LSE: XTA) also added more than 3%. Kazkahmys (LSE: KAZ), BHP Billiton (LSE: BLT), Antofagasta (LSE: ANTO) and Anglo American (LSE: AAL) rose over 2%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, adding more than 2%.

Specialty minerals exploration and development company Thor Mining (AIM: THR) and nickel and iron ore exploration junior Landore Resources (AIM: LND) emerged as the leading fallers among the juniors, shedding over 5%. Cement operator Prosperity Mineral Holdings (AIM: PMHL) also was in decline, sliding 4.1%.

Tunisia operating metal miner Maghreb Minerals (AIM: MMS) and Mozambique operating tantalum producer Noventa (AIM: NVTA) followed, retreating 3%.

Indonesia operating coal miner Churchill Mining (AIM: CHL) was a bright spot among the small caps this morning, climbing 3.5%.

Banks, insurance, private equity

Financial stocks were mixed today. Banking groups did now show much movement in the morning, but managed to stay on positive ground except for HSBC (LSE: HSBA), which started the day with marginal declines. Partly nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) rose marginally, as did Barclays (LSE: BARC) and Standard Charetered (LSE: STAN).

Insurers did slightly better. Old Mutual (LSE: OML) and Aviva (LSE: AV) led the back with each climbing 2%. Legal & General (LSE: LGEN) also was in buying mode, adding 1.2%.

Friends Provident (LSE: FP) rose marginally, while Prudential (LSE: PRU) and Standard Life (LSE: SL) were flat. RSA Insurance Group (LSE: RSA) opened with small declines.

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

Small Cap News

Small cap Australian fund manager Acorn Resources, has acquired 6.1 million shares in Finders Resources (ASX & AIM: FND) at an average price of A$0.33 per share. These were acquired between August and September 2009.

African focused nickel and gold exploration and development junior, Dwyka Resources (AIM & ASX: DWY) is changing its name to Nyota Minerals (AIM & ASX: NYO) effective tomorrow.

Mobile email and data synchronisation provider Synchronica (AIM: SYNC) released its interim results today, reporting a sevenfold jump in revenues, driven by the sales of its flagship products Mobile Backup and Mobile Gateway.

Eastern European focused Aurelian Oil & Gas (AIM: AUL) announced that Voitinel-1 well has reached total depth at 2,076m. The primary Badenian sand objective was non-hydrocarbon bearing, neither were the underlying Albian sands. Shares in Aurelian Oil & Gas plummeted on the open this morning following the announcement, falling almost 30% in early trading.

Irish-based Iran operating miner Persian Gold (AIM: PNG), which was among the companies to report on its interim results today, noted the lack of progress in securing a discovery certificate for its Chah-e-Zard discovery from the Iranian authorities, saying it was looking into other opportunities in the region.

Shares in Minerva PLC (LSE: MNR) soared in morning trade after the property investment, development and management group announced it has refinanced, extended or restructured loan facilities in excess of £750 million.

Greenland Minerals & Energy (ASX: GGG) has appointed London-based investment bank Evolution Securities as its broker and corporate adviser as the company prepares for its next stage of growth.

Leyshon Resources (AIM: LRL, ASX:LRL) has announced the conditional agreement of its long awaited divestment of it’s Chinese Zheng Guang Project. Trading in Leyshon resumed today following the update, this morning’s trading in London saw Leyshon Resources surge over 60% immediately after the news with its shares reaching 9 pence.

Technology company Sarantel Group (AIM: SLG) said it had received first production orders for its Iridium data antenna for use in the Solara Field Tracker 2100, a real-time GPS tracking and messaging device.

Zinc mining and recycling specialist ZincOx Resources (AIM: ZOX) reported interim results today, saying construction of its Jabali mine in Yemen was progressing in line with expectations and reiterating its intention to find a cost effective way of developing its first recycling project.

Gulfsands Petroleum PLC (AIM:  GPX) swung to a profit in the first half, the first in five years, on revenue that rose 47 percent year-on-year, saying production from Block 26 in Syria has already reached the level it was targeting for the end of 2009.

Sirius Exploration PLC (AIM: SXX; OTCBB: SRUXY) said it has has entered into a lock-up agreement with the directors and management of AusPotash Corp pursuant to which Sirius will buy the Australian group  for C$0.40 per share.

Irish Oil and Gas exploration company Petroceltic International (AIM: PCI) has announced a new gas discovery in Algeria. The AT-1 exploration well on the Isarene permit was successfully tested at a depth of 1,915m, and it has been completed for possible future use as a production well. Testing reveals that potential hydrocarbons are a ‘magnitude’ larger than earlier discoveries.

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