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  BAE Group, Serco and Morrison climb, but FTSE 100 falls as commodities decline |
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Overview: the small gains the UK market managed to post yesterday were quickly erased this morning as the FTSE 100 declined almost 2%, dragged down by losses in the financial sector amid expectations of regulatory breakups of bailed out banks after the European Commission approved the breakup of the UK’s nationalized bank Northern Rock (LSE: NRK) after telling Dutch bank ING to reduce its balance sheet in order to secure aid last week.
Base metals focused miners Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) led the fallers in the FTSE 100 with losses of almost 7%, while sector peer Vedanta Resources (LSE: VED) dropped 6% as copper, nickel and zinc declined sharply, while precious metals that continued their freefall, pushing down Lonmin (LSE: LMI), Fresnillo (LSE: FRES) and Randgold Resources (LSE: RRS).
Hedge fund Man Group (LSE: EMG), commercial property company Liberty International (LSE: LII) and airline British Airways (LSE: BAY) followed, retreating more than 5%.
Natural gas producer BG Group (LSE: BG) also weighed on the top tier index with a 2.5% loss after reporting a 44% decline in Q3 profits.
No FTSE 100 constituent posted gains of 1% or more in morning trade.
Defence systems manufacturer BAE Group (LSE: BA) and business services company Serco Group (LSE: SRP) came close with gains of 0.9%, while supermarket chain Morrison (LSE: MRW) and mobile operator Vodafone (LSE: VOD) gained more than 0.5%.
Centrica (LSE: CNA), the parent company of British Gas, also posted a small gain after announcing a £725 million investment to build a 270MW (megawatt) offshore wind farm.
US stock index futures declined this morning, pointing to a lower start on Wall Street.
ConocoPhillips (NYSE: COP) and Coca Cola (NYSE: CCE) are among the companies that are set to report on their quarterly results today.
Commodities
Oil prices still were in decline with December Brent Crude moving down to US$77.41/barrel, while US light, sweet crude fell below US$79/barrel.
Petrofac (LSE: PFC) led the fallers in the sector in the FTSE 100 with a 4.3% slide, while Tullow Oil (LSE: TLW) followed with a loss of almost 4%.
Supermajors BP (LSE: BP) and Shell (LSE: RDSA) both lost about 1.5%, while BG Group (LSE: BG) and Cairn Energy (LSE: CNE) retreated 2.5% and 3% respectively.
Midcaps also were in selling mode in the morning.
Heritage Oil (LSE: HOIL) was at the bottom of the pile with a 4.6% decline, while Dana Petroleum (LSE: DNX), which reported an oil discovery in Norway, shed 2.5%.
However, Dragon Oil (LSE: DGO) managed to hold on, posting marginal losses.
Most oil & gas juniors moved with the market and turned negative.
Energy investor Xtract Energy PLC (AIM: XTR) lost almost 7%.
Ukraine focused gas producer, Regal Petroleum (AIM: RPT) slipped 6%, while North American based explorer Nighthawk Energy (AIM: HAWK) tumbled 4.5%.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG), US focused junior Empyrean Energy (AIM: EME) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) all lost more than 3%.
Gold and Silver drag miners down
Gold and Silver extended losses, falling to US$1,030/oz and US$16.43/oz respectively.
Platinum shed a further $7, declining to US$1,307/oz.
Lonmin’s (LSE: LMI) fall was the steepest as the platinum miner dipped 6%.
Silver producer Fresnillo (LSE: FRES) and Randgold Resources (LSE: RRS) both lost more than 2%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Midcaps followed as gold miner Petropavlovsk (LSE: POG) lost 5.5%, while Aquarius Platinum (LSE: AQP) retreated 4.5%.
Silver producer Hochschild Mining (LSE: HOC) lost almost 4%.
South American based explorer Mariana Resources (AIM: MARL) led the sector with a 25% surge after making a gold-silver discovery at the Dos Calandrias project in Argentina.
Commodity asset development company Mercator Gold (AIM: MCR) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) gained about 4%.
Africa operating gold miner GMA Resources (AIM: GMA) led the fallers with a 12% dip.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) declined 8%, while Africa focused gold deposit developer Cluff Gold (AIM: CLF) followed with a 6% loss.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM), South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) declined more than 5%.
Philippines focused gold producer Medusa Mining (AIM&ASX: MML) also lost 5% despite upping its full year gold production forecast to 86,000 oz.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Africa focused gold miner Pan African Resources (AIM: PAF) both shed 4.7%.
Africa operating gold and platinum miner Goldplat (AIM: GDP) and Copper and gold miner EMED Mining (AIM: EMED) lost 4%, as did Western Australia operating Norseman Gold (AIM: NGL).
Copper and Nickel slide
Base metals focused stocks were weakened by the declines in copper and nickel prices, which slid to US$2.94/pound and US$8.31/pound respectively.
Zinc followed, retreating to US$1.01/pound.
Anglo-Swiss miner Xstrata (LSE: XTA) was at the bottom of the pile with a 7% dip, while Kazakhmys (LSE: KAZ) followed with a 6% decline.
Vedanta Resources (LSE: VED) lost 5%, while Rio Tinto (LSE: RIO) was down 4%.
Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) lost more than 3%, as did Antofagasta (LSE: ANTO).
Eurasian Natural Resources (LSE: ENRC) was close with a 2.8% loss.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, shedding almost 6%.
Likewise, most junior miners were in decline today.
Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) fell 6.5%.
Uranium and copper explorer Kalahari Minerals (AIM: KAH) and Australia focused coking coal producer Caledon Resources (AIM: CDN) both lost more than 4%.
Banks, insurance, private equity
Barclays (LSE: BARC) and Lloyds (LSE: LLOY) were in the lead with losses of over 3.5%, while Standard Chartered (LSE: STAN) and Royal Bank of Scotland (LSE: RBS) retreated 3% and 2.5% respectively.
HSBC (LSE: HSBA) performed relatively well, shedding just 1%.
With the exception of Friends Provident (LSE: FP), which posted marginal gains, all major insurance companies started the day in the red.
Legal & General (LSE: LGEN) and Prudential (LSE: PRU) were in the lead among the fallers with losses of 5.5%.
Aviva (LSE: AV) tumbled 3.7%, while Standard Life (LSE: SL) declined 2.7%.
RSA Insurance Group (LSE: RSA) and Old Mutual (LSE: OML) both shed more than 1.5%.
Private equity group 3i (LSE: III) lost 3.4%.
Small Cap Movers
Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS) and Africa focused agriculture investor Agriterra (AIM: AGTA), which declined 4.5% and 6% respectively.
Pharmaceutica company Sinclair Pharma (AIM: SHP) also was in decline, sliding 10%.
Large and Mid Cap News
HSBC (LSE: HSBA) announced that it is in advanced discussions with China’s fifth largest bank, the Bank of Communications (‘BoCom’) to create a new joint venture company for a Chinese based credit card operation.
The deal will see HSBC invest approximately £100m (RMB1.158bn) for a 20% stake in the joint venture, which will focus on maximising opportunities in China's fast developing consumer mass market.
HSBC has a 19% stake in BoCom.
British American Tobacco (‘BAT’) (LSE: BATS) revealed their performance for the first three quarters of the year in its interim trading statement this morning. The tobacco and cigarette producer says it performed well in the period, despite slowing organic volume growth.
Wolfson Microelectronics (LSE: WLF) released their third quarter interim results, which show an improved financial performance on the previous quarter as the group’s 2009 strategic plan begins to show results.
In a challenging trading environment Wolfson is attempting to double it product base and manage costs.
Insurer Prudential PLC (LSE: PRU) reported a 9 percent fall in third-quarter sales to £700 million, beating the consensus of analysts’ expectations of £653 million, saying there are some encouraging signs of recovery, particularly from its Asian operations.
Rio Tinto (LSE: RIO) has completed the second tranche of its private placement investment in Ivanhoe Mines Ltd (NYSE, TSX: IVN) almost doubling its ownership 19.7% of Ivanhoe's common shares.
The second tranche consists of 46,304,473 common shares for a total consideration of $388 million, reflecting a discounted subscription price of $8.38 per share.
Dana Petroleum (LSE: DNX) announced a new oil discovery at the Jetta prospect, offshore Norway.
The Jetta prospect is close to the Jotun producing oil field in which Dana is a partner.
Centrica plc (LSE: CNA) announced that its 270 megawatt (MW) Lincs offshore wind project has received final investment approval, and that construction is expected to begin in 2010.
Small Cap News
Residential and retail investment and development firm JSM Indochina (AIM: JSM) has agreed to acquire a further high rise residential site in Thao Dien, which it said was the “Belgravia” of Vietnam’s Ho Chi Minh City to add to its existing 600 residential apartments in the area.
Junior gold producer Avocet Mining (AIM: AVM) said its Penjom and North Lanut project continued to operate in line with expectations, reporting increases in gold production and revenues during the third quarter, also restructuring its project facility to bring the Inata project to positive cashflow.
Medusa Mining Ltd (AIM, ASX: MML) has increased the gold production forecast for the current year to 86,000 ounces from 82,000 ozs and reported a rise in production from the Co-O mine in the Philippines for the first quarter to end-September 2009 to 18,054 ozs from 16,009 ozs in the previous quarter at an average grade of 14.7 grams per ton of gold and average cash cost of US$193 per oz.
Developer of CAD and image analysis software Medicsight (AIM: MDST) said its ColonCAD 4.0 software demonstrated impressive detection performance during a recent CAD study carried out at the University of Wisconsin School of Medicine and Public Health.
Central China Goldfields PLC (AIM: GGG) said it was notified that Obtala Resources PLC (AIM: OBT) has increased the number of company shares it controls to 20.4 million from 19.175 million, thus raising its stake to 11.13 percent from 10.5 percent.
South Pacific operating owner and chartered of a fleet of short range tankers Yujin International (AIM: YUJ) reported a reduction in cargoes for its three coastal tankers, which now also waited longer between shipments, saying its full year earnings would be below market expectations and it was hard to tell when revenues would begin to increase again.
Veris plc (AIM: VERI) announced that its shareholder have approved the proposed resolutions to sell the company’s remaining business activities and to delist from both the London Stock Exchange and the Irish Stock Exchange.
The sale of the Property Management and Facilities Management Business to Aramark Ireland Limited and Aramark Investment Limited will realise cash proceeds of €50.8m, the transaction is expected to close by the end of the month.
Mariana Resources Ltd (AIM: MARL) reported a significant new gold-silver discovery at its 100 percent owned Dos Calandrias project in the prospective Deseado Massif region in southern Argentina.
Europe focused oil and gas developer Ascent Resources (AIM: AST) has commenced the drilling of the Fontana-1 appraisal well, targeting the shallow part of the Anagni structure in the company’s Frosinone exploration permit in Italy.
Mobile email and data synchronization group Synchronica PLC (AIM: SYNC), which has been busy receiving orders for its flagship mobile email synchronization product Mobile Gateway, has secured a licensing agreement with a software vendor for the use of its non-code legacy software worth EUR175,000.
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