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  Gold and Silver slide to push down Fresnillo, Randgold, Hochschild and Petropavlovsk, FTSE 100 falls
Reported by Proactive Investors on Friday, 30 October 2009 (on October 30, 2009)
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Overview: the Footsie turned early gains into losses later in the day after a weak start on Wall Street, where the Dow Jones industrial average gave away most of yesterday’s gains, shedding 1.6% despite a positive Chicago PMI update, which showed an unexpected increase in business activity in the US in October. The index topped expectations by reaching 54.2, its highest level in 13 months.
However, the sentiment was hit by the US consumer sentiment data, as the Reuters/University of Michigan Surveys of Consumers showed a decline to 70.6 in October from 73.5 in September.
The FTSE 100, which posted gains of about 0.2% in the morning, was 1.5% below the opening level in late afternoon despite a strong performance by a number of heavyweights, including pharmaceutical group Shire (LSE: SHP), which rose 4.5% after posting a profit in the third quarter, travel company Tui Travel (LSE: TT), insurer Friends Provident (LSE: FP) and security solutions provider G4S (LSE: GFS), which all advanced 3%.
Commercial property companies British Land (LSE: BLND) and Land Securities Group (LSE: LAND) also did well, gaining more than 2%.
Mining stocks were a major drag on the Footsie with most stocks posting heavy losses in response to the declines in metal prices. Oil prices also declined, undermining the energy sector and pushing the chip index further down.
Commodities
December Brent Crude retreated to US$76.39/barrel, while US light, sweet crude for December delivery declined to US$78.28/barrel.
Cairn Energy (LSE: CNE) was the leading faller with a 3.4% decline, while Petrofac (LSE: PFC) followed, dropping 3%. BG Group (LSE: BG) slid 2.5%.
Supermajors BP (LSE: BP) and Shell (LSE: RDSA) lost 1.2% and 1.8% respectively.
Tullow Oil (LSE: TLW) did better, posting only marginal losses.
Midcaps Heritage Oil (LSE: HOIL) and Dragon Oil (LSE: DGO) outperformed the market, posting small gains, while fellow FTSE 250 constituent Dana Petroleum (LSE: DNX) declined 2%.
Juniors weren’t very volatile on Friday.
Europe focused oil and gas developer Ascent Resources (AIM: AST) and US focused junior Empyrean Energy (AIM: EME) led the sector with gains of 8% and 6% respectively.
Kazakhstan operating Max Petroleum (LSE: MXP) advanced 4.3%, while North Sea explorers Xcite Energy (AIM: XEL) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) both tacked on 3%.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) went in a different direction, shedding 4%. Iraq operating Irish oil company Petrel Resources (AIM: PET) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) also wer ein decline, shedding 3%.
Gold and silver decline
Precious metals continued their decline with gold falling to US$1,037/oz, while silver and platinum tumbled to US$16.23/oz and US$1,317/oz respectively.
Major mining stocks were in selling mode today.
Silver miner Fresnillo (LSE: FRES) was at the bottom of the pile with a 6% slide. Gold producer Randgold Resources (LSE: RRS) and platinum miner Lonmin (LSE: LMI) both lost 4.3%, while specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Yamana Gold (LSE: YAU) was down 2%.
Midcaps followed as Aquarius Platinum (LSE: AQP) retreated 6.8%, gold miner Petropavlovsk (LSE: POG) was down 3.3% and silver producer Hochschild Mining (LSE: HOC) pulled back 2%.
Some junior companies were able to post good gains today. South American based explorer Mariana Resources (AIM: MARL), which has recently reported a gold-silver discovery at its Dos Calandrias project in Argentina, led the sector with a 14% surge. Africa operating gold and platinum miner Goldplat (AIM: GDP) followed with an 11% rally.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) advanced 7% and 6% respectively, while South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) climbed 5.5%.
Copper and gold miner EMED Mining (AIM: EMED) and African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) advanced 4.5% and 3.5% respectively.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) headed in a different direction, shedding 4.5%. Commodity asset development company Mercator Gold (AIM: MCR) followed with a 3.8% loss.
Miners plunge as copper and nickel slide
Base metal focused stocks suffered sizeable losses today as metal prices slipped with copper and nickel sliding to US$2.94/pound and US$8.25/pound respectively, while zinc retreated to US$0.98/pound.
Kazakhmys (LSE: KAZ) was the leading faller with a 8% slide, while Eurasian Natural Resources (LSE: ENRC) declined 7%. Xstrata (LSE: XTA) followed with a 6.8% loss, while Vedanta Resources (LSE: VED) and Antofagasta (LSE: ANTO) both shed more than 5.5%.
The world’s largest miner BHP Billiton (LSE: BLT) declined 4%. Anglo American (LSE: AAL) and Rio Tinto (LSE: RIO) lost about 3%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) did relatively well, posting a marginal loss.
South American focused junior miner Herencia Resources (AIM: HER) led the sector with a 15% rally. Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) came close with a 10% advance.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and Russia focused copper and nickel miner Amur Minerals (AIM: AMC) gained more than 6%, while iron ore focused investor Red Rock Resources (AIM: RRR) climbed 5%.
Mineral sands producer Kenmare Resources (LSE: KMR) and laterite nickel specialist European Nickel (AIM: ENK) both added 4%.
Banks, insurance, private equity
Financial stocks switched to selling mode late in the afternoon, turning early gains into losses.
Royal Bank of Scotland (LSE: RBS) was at the bottom of the pile with a loss of almost 3%. Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) declined 2.5%.
Lloyds (LSE: LLOY) and HSBC (LSE: HSBA) posted losses of less than 1%.
Friends Provident (LSE: FP) was one of the few companies in the sector that managed to hold on and post a small gain. Fellow insurers slipped into the red with car insurer Admiral Group (LSE: ADM) leading the way with a 4.3% loss. Aviva (LSE: AV), Old Mutual (LSE: OML) and Prudential (LSE: PRU) followed with losses of more than 3%, while RSA Insurance Group (LSE: RSA) and Legal & General (LSE: LGEN) declined 2% and 1.3% respectively.
Standard Life (LSE: SL) held on, sitting just below the opening level at the end of the day.
Private equity group 3i (LSE: III) moved with the market, shedding almost 3%.
Small Cap Movers
Other notable movers among the small caps included machine to machine (M2M) technology specialist Telit Communications (LSE: TCM), which plunged 10%, as did developer of CAD and image analysis software Medicsight (AIM: MDST). Zimbabwe focused investor LonZim (LSE: LZM) shed 7%.
Large and Mid Cap News
HansonWesthouse retained a “buy” recommendation for Malaysia based manufacturer of natural sweeteners PureCircle (LSE: PURE) following what the broker called a breakthrough in the market and widening of its global footprint following the launch of a number of new Reb-A sweetened food and beverage products over the past 2 weeks.
Vedanta’s (LSE: VED) India based subsidiary Sterlite Industries Ltd (BSE: STER) announced that its wholly owned subsidiary Sterlite Energy Limited has filed a Prospectus with the Stock Exchange Board of India and as such is proposing an initial public offering (IPO) of its equity shares to raise INR51,000m (Approx £659m). The equity Shares of Sterlite Energy are proposed to be listed on the Bombay Stock Exchange. J.P. Morgan and Morgan Stanley are among the Global Co-ordinators and Book Running Lead Managers to the IPO.
Rolls-Royce (LSE: RR.) has won an order worth $720m, for its ‘Trent 700’ engines to power ten Virgin Atlantic Airbus A330 aircraft, deliveries are expected to start in 2011. The order continues a strong relationship with Virgin Atlantic, which first ordered Rolls-Royce engines in 1997.
International Power (LSE: IPR) announced that, together with its partners, it has completed a £235m (A$425) project refinancing for the 687km SEA Gas pipeline, which links Victoria and South Australia. The new financing replaces the existing financing and will run until October 2012.
Ferrexpo plc (LSE: FXPO) has declared it will pay an interim dividend of 3.3 US cents per share for the first six months of 2009. In August, the company deferred its decision due to market uncertainties.
National Express (LSE: NEX) appears to be losing the support of its major shareholder following yesterday’s decision to reject Stagecoach’s merger approach. Spain’s Cosmen Family, which own 18.5% of National Express, said in a statement this morning that they were “disappointed” by National Express’ decision to turn down an offer from Stagecoach.
Small Cap News
African Medical Investments PLC (AIM: AMEI) has agreed a US$47 million equity line with an investment fund managed by New York based Harbinger Capital Partners LLC.
Gold Oil (LSE: GOO) said its revenues doubled over the year to 30 April, while profits turned into losses as the company had to operate amid “difficult circumstances.”
Stock broker Ambrian released an initiating coverage report on Cinpart (AIM: CINP), giving the UK based electrical components producer and supplier a “speculative buy” rating, highlighting the high potential of voltage optimization products that is addressing an extensive market that is at the moment covered by just three players, including Cinpart’s Active Energy.
Nyota Minerals (‘Nyota’) (ASX & AIM: NYO) released their quarterly update this morning, highlighting the transformation of the company after the acquisition of Minerva Resources.
Western Australia operating Norseman Gold (AIM & ASX: NGL) has achieved record capital and ore development levels, posting a 50% quarter on quarter increase in development tones, however production was below forecast as a result.
Brisbane-based nickel and copper developer Discovery Metals (AIM: DME, ASX: DML) released its quarterly results today, saying the bankable feasibility study of its Boseto copper project in Botswana was 60% complete and remained on schedule.
Finders Resources Ltd (AIM & ASX: FND) released its quarterly report for the period ended September 30th, the statement highlighted a quarter in which the company raised a combined $21m through two separate fund raisings. Finders also made progress on its development of the Wetar Copper Project and the Ojolali Gold-Silver Project.
Shares in Forte Energy NL (ASX, AIM: FTE) rose in London trade after the uranium and copper explorer announced encouraging assay results from its Bir En Nar and Bir Moghrein projects in Mauritania, West Africa. The share was trading up more than 16 percent in late morning deals at around 10.25 pence a share.
Asia Digital (AIM: ADH) today announced its intention to raise almost £1.3m to reduce existing creditors and beef up the group’s working capital, required for the expected business growth.
UK and Europe focused online publishing business Play LA Inc (OTCBB: PLLAF) said it won online betting group Betfair as advertising partner for the 2009 Breeders Cup coverage published on Play LA’s UK flagship website, www.bettingchoice.co.uk.
Endeavour International Corp (NYSE Amex: END; LSE: ENDV) said it has acquired 50 percent of the working interest owned by Cohort Energy Co in 24 wells located in five fields and certain proved undeveloped locations associated with the proved developed gas assets in North Louisiana and East Texas for US$15 million.
Links: Full news story
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