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  BP, Reed Elsevier and Home Group lead FTSE 100 higher, miners decline as prices fall
Reported by Proactive Investors on Tuesday, 27 October 2009 (on October 27, 2009)
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Overview: the markets, which went south yesterday after the resurgent US dollar sent commodities sliding, had to absorb yet another hit today when the consumer confidence update in the US showed an unexpected decline in the Conference Board’s index of consumer attitudes to 47.7 in October from 53.4 in September, its lowest since July. The Conference Board also offered a gloomy outlook, saying more consumers expected business and job market conditions to deteriorate.
Despite the downbeat update, Wall Street was off to a positive start with the Dow Jones industrial average rising 0.5% in early trade to recoup some of yesterday’s losses when it tumbled more than 1% early and stayed deep in the red throughout the day.
The FTSE 100 mirrored Dow’s gains, also adding 0.5% to recapture the 5,200 mark.
London based oil and gas supermajor BP (LSE: BP) was atop the leaderboard after posting a profit of US$5.34 billion, considerably higher than the anticipated US$3 billion. Publisher Reed Elsevier (LSE: REL) and Home Retail Group (LSE: HOME) followed, advancing almost 4%.
Pharmaceutical company GlaxoSmithKline (LSE: GSK) also did well, climbing 3% after securing approval to sell its leukaemia drug in the US.
Financial stocks were in selling mode today. Bailed out banks Lloyds (LSE: LLOY) and RBS (LSE: RBS) were still dragging the market down with another round of losses, while Barclays (LSE: BARC) tumbled 4% on the acquisition of Standard Life (LSE: SL). Miners joined in, feeling the impact of the declining metal prices.
Investment management company Man Group (LSE: EMG) and inter-dealer money broke ICAP (LSE: IAP) also were in decline, shedding 3.5% and 2.5% respectively.
Commodities
Oil prices held steady during the day as December Brent Crude remained at US$77.67/barrel, while US light, sweet crude for December delivery inched higher to US$79.20/barrel.
Oil and gas stocks were mixed. BP (LSE: BP) gained 4.3%, while fellow supermajor Shell (LSE: RDSA) added 1.8%, as did another FTSE 100 constituent BG Group (LSE: BG). Cairn Energy (LSE: CNE) rose marginally, while Petrofac (LSE: PFC) posted small losses. Tullow Oil (LSE: TLW) also was in decline, shedding 2%.
Midcaps also were mixed. Dragon Oil (LSE: DGO) rose 1.3%, while Dana Petroleum (LSE: DNX) followed with a marginal gain. However, fellow FTSE 250 constituent Heritage Oil (SLE: HOIL) ended the day in the negative with a small loss.
Kazakhstan focused junior Max Petroleum (LSE: MXP) emerged among the leading fallers in the sector with an 8% decline. North American based developer Nighthawk Energy (AIM: HAWK) followed, shedding 7%.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) fell 5%, while Mongolia-focused Petro Matad Ltd (AIM: MATD) and US focused junior Empyrean Energy (AIM: EME) lost more than 4%.
North Sea explorers Xcite Energy (AIM: XEL) and Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) both shed 4%.
Gold and Silver tumble to weaken miners
Gold slid to US$1,030/oz, but then climbed back to US$1,038/oz. Silver declined to US$16.81/oz and Platinum moved down to US$1,312/oz.
All major mining companies were in decline today, responding to the negative movements in the commodity markets.
Platinum focused Lonmin (LSE: LMI) and Johnson Matthey (LSE: JMAT), which both managed to post gains early today, failed to hold on and turned negative, posting small gains. Randgold Resources (LSE: RRS) lost 1.5%, while silver miner Fresnillo (LSE: FRES) emerged as the leading faller in the sector in the FTSE 100, retreating 3.7%.
Yamana Gold (LSE: YAU) was down 5.5%.
Midcaps fell harder. Gold miner Petropavlovsk (LSE: POG) declined 2.6%, while Aquarius Platinum (LSE: AQP) slipped 3.5%. Hochschild Mining (LSE: HOC) was the leading faller in the sector, pluging almost 8%.
Junior miners mostly were in decline with a few notable exceptions.
Tajikistan operating gold miner Kryso Resources (AIM: KYS) outperformed the sector today, rallying 20% on no news. Turkey focused gold miner Ariana Resources (AIM: AAU) followed, surging 10%.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) remained positive with a 3.5% advance.
Commodity asset development company Mercator Gold (AIM: MCR) was among the leading fallers, shedding 7.5%, while copper and gold miner EMED Mining (AIM: EMED) tumbled 6%.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) lost 5%, while Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) both declined more than 4%.
Western Australia operating Norseman Gold (AIM: NGL), South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) shed more than 3%.
Copper and Nickel decline
Copper and Nickel improved slightly, reaching US$2.99/pound and US$8.50/pound respectively. Zinc was slightly lower at US$1.03/pound.
Base metals focused stocks also fell. Indian miner Vedanta Resources (LSE: VED) was at the bottom of the pile with a 4% slide. Rio Tinto (LSE: RIO), Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL) retreated 2.5%. Xstrata (LSE: XTA) lost 2%, while Antofagasta (SLE: ANTO) was close with a decline of 1.8%. The world’s largest miner BHP Billiton (LSE: BLT) dropped 1.3%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, shedding 2%.
Russia focused nickel and copper miner Amur Minerals (AIM: AMC) was among the leading fallers in the sector with a 6% drop. Laterite nickel specialist European Nickel (AIM: ENK) and tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) lost more than 4%.
South American focused junior miner Herencia Resources (AIM: HER) and copper and nickel explorer Regency Mines (AIM: RGM) lost almost 4%.
Southern Africa focused Strategic Natural Resources PLC (AIM: SNRP) went against the tide, adding 4.5%.
Banks, insurance, private equity
Partly nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) weren’t done falling, shedding a further 6.5% and 4.5% on top of yesterday’s losses after the European Commission told Dutch bank ING to reduce balance sheet in order to get state aid.
Barclays (LSE: BARC), which has just acquired Standard Life (LSE: SL), and Standard Chartered (LSE: STAN) followed the trend, retreating 3.9% and 2.7% respectively. HSBC (LSE: HSBA) performed relatively well, ending the day with small losses.
Friends Provident (LSE: FP) outperformed fellow insurers, advancing almost 1%, while most of its sector peers turned negative.
RSA Insurance Group (LSE: RSA) was at the bottom of the pile with a 2% decline, while Prudential (LSE: PRU) and Legal & General (LSE: LGEN) shed 1%.
Old Mutual (LSE: OML) declined marginally, while Aviva (LSE: AV) was flat.
Private equity group 3i (LSE: III) retreated 1.6%.
Small Cap Movers
Other notable movers among the small caps included ecologically friendly crop nutrition and crop protection products developer Plant Impact PLC (AIM: PIM) with a 7% slide.
Synchronisation software developer Synchronica (AIM: SYNC) lost 7%, while Latin America operating power producer Rurelec (AIM: RUR) dropped more than 9%.
Africa focused investor Lonrho (AIM: LONR) tacked on 5%.
Large and Mid Cap News
ARM Holdings (LSE: ARM, NASDAQ: ARMH), announced its unaudited financial results for the third quarter and nine months ended 30 September 2009. In the statement ARM revealed it has continued to outperform the semiconductor industry and gain market share, the two percent decrease in like-for-like profit remains in-line with previous guidance.
South African focused Platinum producer, Aquarius Platinum (LSE: AQP) revealed a significant improvement in its financial performance, reporting increased net profit in the period of $9.5 million versus a $21 million loss in 2008. Attributable production in the first quarter was 96,500 ounces of Platinum Group Metals (PGM). Aquarius has benefitted considerably from the improving state of PGM prices.
Mondi Group (LSE: MNDI) released it Interim Management Statement for Q3, performance was in-line with expectations as Mondi achieved modestly lower quarter-on-quarter underlying profits. Volumes in most areas of the business continue to recover from the 2008 lows and price increases have recently been announced in most European packaging grades.
Small Cap News
Ormonde Mining PLC (AIM: ORM) has won mining giant Antofagasta PLC (LSE: ANTO) as partner for an exploration joint venture on the La Zarza copper-molybdenum ground holdings in the Huelva Province of southern Spain, and work programmes will commence immediately.
West African focused gold deposit developer Cluff Gold (AIM & TSX: CLF) has commissioned the Angovia Gold Mine in Côte d'Ivoire, getting closer to achieving the targeted production level in Q4.
Upstream oil and gas company Aminex (AIM: AEX) has encountered oil shows and gas readings in the South Malak-1 well in the West Esh El Mellaha PSC (production sharing license) area in Egypt, which has now been drilled to a total depth of 11,200 feet.
Aberdeen-based offshore wind development company SeaEnergy (AIM: SEA) has entered an agreement with Taiwan Generations Corporation (TGC) to jointly plan, construct and operate windfarms in Taiwan, looking to capitalise on the country’s growing emphasis on renewable energy.
Obtala Resources PLC (AIM:OBT) said grab samples taken last month at the newly acquired Busolwa gold project in Tanzania show a “highly encouraging” potential for gold mineralisation within the wall rocks which are left behind by the current artisanal miners.
Tottenham Hotspur plc (AIM: TTNM) announced it has submitted its Planning Application for the proposed new stadium in the London Borough of Haringey. The move marks a major milestone in the Clubs regeneration plans. The new stadium and the surrounding developments are projected to improve earnings capacity through both ticket sales and revenues from a multi-million pound investment area which brings housing, retail, leisure and hospitality venues.
Minco Plc (AIM: MIO) announced that its TSX-V quoted subsidiary, Xtierra (TSX-V: XAG) entered into an option agreement with private Mexican interests whereby it may acquire a 100% interest in the El Dorado gold project. The property is located in the Pinos district of southeastern Zacatecas State, Mexico and covers 2,890 hectares of mining claims.
Tethys Petroleum (TSX: TPL) updated investors on its operations in Central Asia, saying it has identified the location for the next development well at the North Urtabulak field in Uzbekistan and commenced production testing at one of the two hydrocarbon bearing intervals in the AKD01 well at Akkulka in Kazakhstan.
Gemfields PLC (AIM: GEM) said it has received the full US$5.9 million of proceeds from the July 2009 emeralds auction in London and that the response to date from stakeholders seeking to attend the forthcoming event in the last week of November has been “very positive”.
Irish mineral sands producer Kenmare Resources PLC (LSE: KMR) said its development association, KMAD, has won the Nedbank Socio-Economic Award for its activities aimed at social and economic enhancement of the communities surrounding Kenmare's Moma titanium minerals mine in northern Mozambique.
Shares in Ariana Resources PLC (AIM: AAU) rose after the Turkey-focused gold group announced it is setting up a 50-50 joint venture with a domestic partner to develop the Sindirgi and Tavsan projects in the country.
Links: Full news story
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