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  Copper and Nickel fall to push down Xstrata, Anglo and BHP, FTSE 100 falls
Reported by Proactive Investors on Wednesday, 28 October 2009 (on October 28, 2009)
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Overview: The FTSE 100 failed to return to positive ground, weighed down by losses in the mining sector, which was struggling as metals prices declined.
Base metals focused miners Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) led the fallers in the FTSE 100 with losses of 8-9%, while sector peer Rio Tinto (LSE: RIO) dropped 6% as copper, nickel and zinc fell sharply, while precious metals continued their freefall, pushing down Lonmin (LSE: LMI), Fresnillo (LSE: FRES) and Randgold Resources (LSE: RRS).
Hedge fund Man Group (LSE: EMG), plumbing and heating materials supplier Wolseley (LSE: WOS) and airline British Airways (LSE: BAY) followed, shedding 8%, 7% and 6% respectively.
Insurer Prudential (LSE: PRU) was one of the heaviest fallers, dipping 9% after reporting a 9% drop in Q3 sales.
Natural gas producer BG Group (LSE: BG) also weighed on the top tier index with a 3.5% loss after reporting a 44% decline in Q3 profits.
Wall Street opened lower with the Dow Jones industrial average sliding 0.5%, while the Nasdaq composite tumbled 1.3%. The markets failed to benefit from better than expected results from oil company ConocoPhillips (NYSE: COP), whose quarterly revenues fell 42%, while profits declined fourfold, which, however, still topped market expectations. Soft drink bottler Coca Cola Enterprises (NYSE: CCE) also had a good quarter as profits rose 15%.
Only a handful of blue chips managed to post gains of 1% or more. Insurer Friends Provident (LSE: FP) outperformed the market with a 3% climb, while retailer Tesco (LSE: TSCO) was a distant second with a gain of less than 2%. Supermarket chain Morrison (LSE: MRW) and beverage group Diageo (LSE: DGE) both tacked on 1.5%.
Commodities
Oil prices declined further with December Brent Crude moving down to US$76.42/barrel, while US light, sweet crude for December delivery slipped to US$78/barrel after hitting $81 a few days ago.
Oil stocks responded with losses.
Supermajors BP (LSE: BP) and Shell (LSE: RDSA) declined 2% and 1% respectively.
Petrofac (LSE: PFC) led the fallers in the sector in the FTSE 100 with a 5.4% slide, while Tullow Oil (LSE: TLW) followed with a loss of 4.5%. BG Group (LSE: BG) was down 3.5%, while Cairn Energy (LSE: CNE) retreated 4.3%.
Midcaps also declined. Dana Petroleum (LSE: DNX) tumbled 5.3%, while Heritage Oil (LSE: HOIL) lost 3.8%.
Dragon Oil (LSE: DGO) did relatively well with a 1.5% slide.
Most juniors moved with the market and turned negative.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Iraq operating Irish oil company Petrel Resources (AIM: PET) were at the bottom of the pile with losses of 14% and 11% respectively. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) followed, dipping 8%.
Ukraine focused gas producer, Regal Petroleum (AIM: RPT) dropped 6%, while Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and North Sea explorers Xcite Energy (AIM: XEL) all shed more than 5%.
North American based explorer Nighthawk Energy (AIM: HAWK) moved down 5%.
Europe focused oil and gas developer Ascent Resources (AIM: AST) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) lost more than 4%, as did Kazakhstan operating Max Petroleum (LSE: MXP) and US focused junior Empyrean Energy (AIM: EME).
Energy investor Xtract Energy PLC (AIM: XTR) declined 3%.
Miners tumble as gold and silver slide
Precious metals were in decline today with Gold slipping to US$1,031/oz and Silver moving down to US$16.26/oz. Platinum fell to US$1,309/oz.
Platinum producer Lonmin (LSE: LMI) led the fallers with a 8% drop. Silver miner Fresnillo (LSE: FRES) and gold producer Randgold Resources (LSE: RRS) declined 4.7% and 3.7% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) lost 2.3%.
Yamana Gold (LSE: YAU) lost 1.1%.
Midcaps fell into the same pattern. Aquarius Platinum (LSE: AQP) sank to the bottom of the group with a 7.3% loss, while gold miner Petropavlovsk (LSE: POG) shed 5.5%. Silver producer Hochschild Mining (LSE: HOC) lost almost 3%.
A few juniors managed to outperform the sector and post gains.
South American based explorer Mariana Resources (AIM: MARL) rose 10% after reporting a gold and silver discovery at its Dos Calandrias project in Argentina.
Argentina focused gold explorer Patagonia Gold (AIM: PGD) and commodity asset development company Mercator Gold (AIM: MCR) also did well, tacking on 6% and 4% respectively.
Africa focused gold miner Pan African Resources (AIM: PAF) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) led the fallers with losses of 11% and 10% respectively.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Turkey focused gold miner Ariana Resources (AIM: AAU) followed with declines of 9.5%.
Africa focused gold deposit developer Cluff Gold (AIM: CLF), Brazil focused gold miner Horizonte Minerals (AIM: HZM) and Western Australia operating Norseman Gold (AIM: NGL) all lost more than 7%.
Copper and gold miner EMED Mining (AIM: EMED), Africa operating gold miner GMA Resources (AIM: GMA) and Western Australia operating Norseman Gold (AIM: NGL) followed with losses of 6%.
South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) was down 3.7%.
Base metals fall
Copper and Nickel fell heavily, arriving at US$2.93/pound and US$8.29/pound respectively, while Zinc fell below US$1/pound.
Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) were at the bottom of the pile with losses of more than 8%. Rio Tinto (LSE: RIO) was close with a 6% decline.
BHP Billiton (LSE: BLT) and Eurasian Natural Resources (LSE: ENRC) both retreated 5.5%, while Antofagasta (LSE: ANTO) and Anglo American (LSE: AAL) declined 4.7% and 3.7% respectively.
Vedanta Resources (LSE: VED) also lost about 4%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, tumbling 6.8%.
Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) was the leading faller among the juniors, dipping 15%. Mineral sands producer Kenmare Resources (LSE: KMR) and Australia focused coking coal producer Caledon Resources (AIM: CDN) followed, moving down 8% and 6% respectively.
South American focused junior miner Herencia Resources (AIM: HER) and zinc mining and recycling specialist ZincOX (AIM: ZOX) were down 4%, while uranium and copper explorer Kalahari Minerals (AIM: KAH) and laterite nickel specialist European Nickel (AIM: ENK) lost more than 3%.
Banks, insurance, private equity
All major financial stocks plunged into the red on Wednesday. Barclays (LSE: BARC) was at the bottom of the pile with a 6.7% slide, while Standard Chartered (LSE: STAN) followed with a 4.8% decline. Lloyds (LSE: LLOY) lost 4%, while fellow bailed out bank Royal Bank of Scotland (LSE: RBS) lost 2%.
HSBC (LSE: HSBA) outperformed sector peers with a decline of only 1%.
Friends Provident (LSE: FP) was the only insurer to stay on positive territory, posting a 3% gain.
Prudential (LSE: PRU), whose quarterly sales fell 9%, emerged as the leading faller in the sector with a 9% slide. Legal & General (LSE: LGEN) lost 6%, while Aviva (LSE: AV) declined 5%. RSA Insurance Group (LSE: RSA) and Standard Life (LSE: SL) both declined 2.5%, while Old Mutual (LSE: OML) lost 3.7%.
Private equity group 3i (LSE: III) retreated 3.7%.
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
Rambler Metals & Mining PLC (TSX-V: RAB; AIM: RMM) said it is currently still engaged in discussions with a number of third parties, with which it holds confidentiality agreements, for further project financing, as it reported results for the full year to end-July 2009.
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.
Links: Full news story
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