Overview: the FTSE 100 was off to a moderately good start in the morning following a higher finish on Wall Street, while commodity prices were at roughly the same levels as on Tuesday. Yet gold and silver declined later in the day, while oil prices also inched lower, sending mining and energy stocks down to push down the FTSE 100. The blue chip index turns negative later in the day when Wall Street opened lower as the Dow Jones average lost 15 points in early trade.
Fashion house Burberry (LSE: BRBY) led the blue chips at midday with a gain of about 6.2%, followed by bank Standard Chartered (LSE: STAN) and insurer Prudential (LSE: PRU), which was upgraded to “outperform” by JP Morgan Cazenove, which gained 3.9% and 3.5%. Hedge fund Man Group (LSE: AMG) also did well, climbing 3.2%.
Software manufacturer Autonomy Corporation (LSE: AU) and satellite communications company Inmarsat (LSE: ISAT) also made it to the leaderboard, climbing about 1.5%.
The top fallers list was dominated by commercial property companies after Liberty International (OLSE: LII) announced a £316 million cash call, as two FTSE 250 house builders Redrow (LSE: RDW) and Barratt Developments (LSE: BDEV) did the same, aiming to raise a combined £876.5 million to cut debts. Yet while Redrow and Barratt rose, Liberty dipped 11%, dragging down sector peers Hammerson (LSE: HMSO) and British Land (LSE: BLND), which declined 3.8% and 4.6% respectively, also making it to the top three. Miner Eurasian Natural Resources (LSE: ENRC) lost 3.2%, as did tour operator Thomas Cook Group (LSE: TCG).
Commodities
Oil prices inched lower today with Brent Crude moving down to US$68.7/barrel and US light crude sitting at US$71.5/barrel.
Major oil stocks were little moved today with the exception of mid cap Heritage Oil (LSE: HOIL), which slid 3.3%.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) both finished with marginal declines, as did fellow blue chip Cairn Energy (LSE: CNE). Other FTSE constituents Petrofac (LSE: PFC), Tullow Oil (LSE: TLW) and BG Group (LSE: BG) all finished in the black, but made little headway.
In the FTSE 250, Dragon Oil (LSE: DGO) posted small gains and Dana Petroleum (LSE: DNX) inched lower.
Ukraine operating gas producer, Regal Petroleum (AIM: RPT) led the juniors, rallying 13% on an operational update from its Mekhediviska Golotvshinska and Svyrydivske gas fields.
Latin American focused Gold Oil (LSE: GOO) followed, gaining almost 7% to recoup Monday’s losses.
Energy investor Xtract Energy (AIM: XTR) and US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) both rose about 2.5-3%, while Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico added over 5%.
Gulf of Mexico focused Pantheon Resources (AIM: PANR) was among the leading fallers with a 6.3% decline. North Sea explorers Xcite Energy (AIM: XEL) joined in, shedding 4%.
US focused junior Empyrean Energy (AIM: EME), Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP), North American based explorer Nighthawk Energy (AIM: HAWK) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) all dropped about 3%.
Miners weak on lower gold, silver
Precious metals declined from yesterday’s levels. Gold retreated to US$1,008/oz, Silver moved down to US$16.73/oz and Platinum declined to US$1,321/oz.
All major mining stocks declined.
Frenillo (LSE: FRES) was the only precious metals focused miner in the FTSE 100 to stay afloat, holding on to the opening level. Gold producer Randgold Resources (LSE: RRS) declined marginally, while platinum miner Lonmin (LSE: LMI) lost 1.5%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) was sitting just below the opening level in late afternoon.
In the FTSE 250, silver producer Hochschild Mining (LSE: HOC) dropped 1.3%, while gold miner Peter Hambro (LSE: POG) declined marginally and Aquarius Platinum (LSE: AQP) shed 1%.
GMA Resources (LSE: GMA), which released its interim report today, posting higher revenues and production levels, pulled back in the morning with an 18% fall after spiking over 20% yesterday in anticipation of the results.
West African Diamonds (AIM: WAD) dipped 6.9%. Fijian focused Vatukoula Gold Mines (AIM: VGM), London listed Australian gold producer Leyshon Resources (AIM: LRL), Turkey focused gold explorer Stratex International (AIM: STI) and nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR) all lost 3%.
South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) led the group, surging 9.7%. UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) and Uzbekistan focused gold miner Oxus Gold (AIM: OXS) followed with gains of over 6%.
Philippines operating gold producer Medusa Mining (AIM&ASX: MML) and South American focused Mariana Resources (AIM: MARL) advanced 4%.
Copper and nickel tumble, send down miners
Base metals also were in decline. Copper dropped to US$2.74/pound and Nickel declined to US$7.95/pound. Zinc inched lower, settling at US$0.85/pound.
With the exception of Xstrata (LSE: XTA) and Anglo American (LSE: AAL), which managed to stay slightly above the opening levels, all major mining stocks were in decline on Wednesday.
Copper miner Antofagasta (LSE: ANTO) was the leading faller with a 1.2% slide. Kazakhmys (LSE: KAZ), Rio Tinto (LSE: RIO), Vedanta Resources (LSE: VED) and BHP Billiton (LSE: BLT) all posted declined of less than 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, sliding 1%.
South Africa operating chrome miner Chromex Mining (AIM: CHX) was the leading riser among the juniors, rallying 14.9%.
Russian focused copper and nickel miner Amur Minerals (LSE: AMC) led the juniors in declines, shedding 6.6%. Nickel laterite play Rusina Mining (AIM: RMLA) and Tunisia operating metal miner Maghreb Minerals (AIM: MMS) followed, shedding 5.5% and 4% respectively.
Banks, insurance, private equity
Financial stocks were largely mixed.
Standard Chartered (LSE: STAN) led blue chip banks with a 3.8% climb. Lloyds (LSE: LLOY) managed to stay afloat with a marginal gain, but fellow bailed out bank Royal Bank of Scotland (LSE: RBS) declined 3%. Barclays (LSE: BARC) also slipped into the red, shedding 1%.
HSBC (LSE: HSBA) declined marginally.
Insurers fell into roughly the same pattern. Aviva (LSE: AV) was the leading faller with a decline of 3.3%. Old Mutual (LSE: OML) also was in selling mode, moving down 2.3%. Friends Provident (LSE: FP) declined marginally.
Prudential (LSE: PRU) outperformed the sector, climbing 3%. Standard Life (LSE: SL) and Legal & General (LSE: LGEN) added more than 1%. RSA Insurance Group (LSE: RSA) rose marginally.
Private equity group 3i (LSE: III) lost 1%.
JP Morgan Chase (LSE: JMC) climbed 2.3%.
Large and Mid Cap News
United Utilities Group (LSE: UU) released a trading update for the six months ending 30 September 2009, stating that the company expected a sound underlying financial performance for the period.
Phone directory publisher Yell Group (LSE: YELL) said today it intended to extend the maturity of its debts to 2014 and raise some £500 million through an equity issue as part of its plan to refinance the group.
Mid cap housebuilder Redrow (LSE: RDW) said today it planned to raise £150 million through a rights issue to repay debts and add new land assets to its portfolio by acquiring developer Harrow Estates with options to buy further assets from the company.
Shares in Barratt Developments (LSE: BDEV) rose after the Newcastle-based property development company announced an equity placing and right issue, aiming to raise £720.5 million to reduce debts and have sufficient cash resource to develop existing sites and buy new land.
The Game Group Plc (LSE: GMG) announced its first half results this morning, H1 profits remain in-line with management expectations. The results which the company describes as ‘solid’, have been received poorly by investors with Game shares falling 3% after the first hour of trading.
Small Cap News
Yesterday saw AIM listed GMA Resources (AIM: GMA) among the junior market’s strongest performers rising as much as 25%; the move came as investors anticipated today’s half-yearly results. In today’s results GMA announced that they had generated the Company’s first profit since its inception, however on the operational front, the junior gold producer highlighted several ongoing issues.
Regal Petroleum PLC (AIM: RPT) said the MEX-106 and SV-58 wells in Ukraine, developing the Mekhediviska Golotvshinska (MEX-GOL) and Svyrydivske (SV) gas and condensate fields, have reached their respective target depths, and a third development well was spudded early this month.
Shares in Bateman Litwin (AIM: BNLN) dipped 24% after the oil and gas services company released a trading update, projecting its revenues to slide and earnings margin to be at about zero, also saying it was looking into asset disposals with a few proposals already on the table.
Irish zinc explorer Connemara Mining Company PLC (AIM: CON) is planning a further 5,000 plus metres of drilling, in possibly 15 holes, during the remainder of 2009 at its Stonepark project in County Limerick where good results in 2008 were topped by a very promising zinc-lead find on the first hole of the 2009 drilling campaign, as announced earlier this month.
Seeing Machines Ltd (AIM: SEE) said it started seeing signs of recovery in the last quarter as it reported results for the year to end-June 2009 which showed revenue rising to A$5.22 million A$4.4 million previously.
Provexis Plc (AIM: PXS) announced it is in discussions with institutional investors and high net worth individuals to raise approximately £5m through a subscription. In its statement Provexis acknowledged the recent share price movement, commenting that the prospective subscription would be at a significant discount to the current share price.
ReneSola Ltd (NYSE: SOL; AIM: SOLA), a Chinese manufacturer of solar products, said it signed an agreement to buy Dynamic Green Energy Ltd for 26.787 million newly issued ReneSola ordinary shares and US$10 million in convertible promissory notes.
Nanoco Group PLC (AIM: NANO), specialised in developing and manufacturing commercial quantities of quantum dots, has signed a joint development agreement with a major Japanese electronics company under which it will design and develop quantum dots for use in light emitting diodes (LEDs) in liquid crystal display (LCD) televisions.
Supplier of Microsoft solutions for the supply chain K3 Business Technology Group (LSE: KBT) rejoiced at yesterday’s announcement from Microsoft (NASDAQ: MSFT), which said it was now expanding presence in the retail sector with the acquisition of Dynamics AX retail solution from LS Retail EHF to expand its Dynamics suite of ERP (enterprise resource planning) software.
Peru-based Minera IRL Ltd (AIM: MIRL) said it signed a definitive agreement and management agreement with Catalina Resources on the La Falda gold project in Chile; the deals supersede the letter of intent announced in late March 2009 in which the terms for MIRL to earn a 75 percent equity interest were set out.
Alternative energy company Ceres Power (AIM: CWR) said today it had agreed to outsource the manufacturing of the volume boiler assembly of its residential Combined Heat&Power (CHP) programme with British Gas to Dutch heating appliances maker Daalderop, saving it the need to build an in-house facility for the purpose.