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  Lloyds gains, but RBS, Barclays and HSBC fall to push down FTSE 100
Reported by Proactive Investors on Tuesday, 3 November 2009 (on November 3, 2009)
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Overview: the FTSE 100 managed to recoup some of its early losses later in the session, helped by a good performance from a few companies in the financial and retail sectors.
The blue chip index slipped 2% in early trade, dragged down by heavy losses from Royal Bank of Scotland (LSE: RBS) which long with another bailed out bank Lloyds (LSE: LLOY) agreed to cut bonuses in return for another £31.3 billion from the government, which will bring its stake in RBS up to 84% from the current 70%.
Other prominent fallers included miners Xstrata (LSE: XTA), Fresnillo (LSE: FRES), ENRC (LSE: ENRC) and Lonmin (LSE: LMI) as well as oil and gas company Tullow Oil (LSE: TLW), which were all hurt by declines in oil and metal prices.
Inter-dealer money broker ICAP (LSE: IAP), tour company Thomas Cook Group (LSE: TCG), technology group Invensys (LSE: ISYS) and asset management company Schroders (LSE: SDR) joined in with losses of over 3%.
A few companies managed to make good gains in late afternoon, helping put the Footsie back above the 5,000 mark. The aforementioned Lloyds and gold miner Randgold (LSE: RRS) ended up as the top performers in the market with gains of over 3% whilst just two other companies managed to climb 1% or more with insurer Legal & General (LSE: LGEN) tacking on 1.3% and aerospace and defence systems manufacturer Cobham (LSE: COB) adding 1.2%.
Trading in the US stock market was slightly better than expected as while the early decline on Wall Street was as sharp as predicted, the Dow Jones industrial average managed to stage a recovery, trimming its losses to just 0.4% and even coming back to positive ground at one point in midmorning to further bolster the Footsie.
Commodities
Oil prices rose slightly compared to the morning levels with December Brent Crude stopping just short of US$76/barrel, while US light, sweet crude for December delivery inched higher to US$78.18/barrel.
Almost all major oil and gas stocks were in decline. Tullow Oil (LSE: TLW) was at the bottom of the pile with a 3.3% slide. Petrofac (LSE: PFC) was close, shedding 2.8%.
BP (LSE: BP) added 1%, while fellow supermajor Shell (LSE: RDSA) declined marginally, as did Cairn Energy (LSE: CNE).
BG Group (LSE: BG) was down 1.2% to 1,061 pence.
Midcaps also fell except for Dragon Oil (LSE: DGO), which managed to post a marginal gain. Fellow FTSE 250 constituents Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) lost 5% and 2.2% respectively.
US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) led the sector with an 11% rally, while most other small caps declined.
Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), Europe focused oil and gas developer Ascent Resources (AIM: AST) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) went in the opposite direction, shedding 6%, 5% and 4% respectively.
US focused junior Empyrean Energy (AIM: EME) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) both lost more than 3%.
Gold rallies to boost Randgold, Yamana and Petropavlovsk
Gold reached new highs today as the US Dollar weakened. The yellow metal tested US$1,080/oz, while Silver and Platinum improved to US$16.97/oz and US$1,346/oz respectively.
Miners were mixed as while gold producers rose, silver and platinum stocks declined.
FTSE 100 gold miner Randgold Resources (LSE: RRS) and sector peer from the FTSE 250 Petropavlovsk (LSE: POG) tacked on 3% and 1% respectively. Yamana Gold (LSE: YAU) also added 3%.
Other blue chips, platinum miner Lonmin (LSE: LMI) and silver producer Fresnillo (LSE: FRES) lost 3.2% and 2.9% respectively, while platinum focused specialty chemicals firm Johnson Matthey (LSE: JMAT) slid1.5%.
Midcap silver producer Hochschild Mining (LSE: HOC) was flat, while fellow FTSE 250 constituent Aquarius Platinum (LSE: AQP) dropped 1.3%.
South American based explorer Mariana Resources (AIM: MARL) was the leading faller among the small caps with a 14% plunge. Tajikistan operating gold miner Kryso Resources (AIM: KYS), Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) followed, shedding 8%, 6% and 5% respectively.
African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) both lost more than 3.5%.
Turkey focused gold miner Ariana Resources (AIM: AAU) outperformed the sector, climbing 7%, while Commodity asset development company Mercator Gold (AIM: MCR) and copper and gold miner EMED Mining (AIM: EMED) added more than 4%.
Nickel and zinc improve, but miners fall as copper slides
Base metals were mixed as while Copper slid to US$2.95/lb, Nickel and Zinc rose to US$8.20/lb and US$0.98/lb respectively.
Base metals stocks turned negative early and failed to recover until the end of the day.
Eurasian Natural Resources (LSE: ENRC) was the leading faller with a loss of over 2.5%, while BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) followed with declines of 2%.
Kazakhmys (LSE: KAZ), Vedanta Resources (LSE: VED) and Anglo American (LSE: AAL) fell 1%. Antofagasta (LSE: ANTO) posted small losses, as did Rio Tinto (LSE: RIO).
Laterite nickel specialist European Nickel (AIM: ENK) outperformed the sector, rising 7%, while copper and nickel explorer Regency Mines (AIM: RGM) and Strategic Natural Resources PLC (AIM: SNRP) followed, advancing 4%.
Botswana operating nickel and copper miner Discovery Metals (AIM: DME) was among the leading fallers in the market with a loss of almost 8%. Mineral sands producer Kenmare Resources (LSE: KMR) was close with a 6% decline.
South American focused junior miner Herencia Resources (AIM: HER) and Uranium and copper explorer Kalahari Minerals (AIM: KAH) dropped more than 4%.
Banks, insurance, private equity
Royal Bank of Scotland (LSE: RBS) later trimmed its losses to just 6%, while Lloyds (LSE: LLOY) lost about 1%, keeping its gains down to 2.8%.
Standard Chartered (LSE: STAN) lost more than 1%, as did Barclays (LSE: BARC), while HSBC (LSE: HSBA) was down 3%.
With the exception of Legal & General (LSE: LGEN), which posted a gain of about 1%, all major insurance stocks turned negative on Tuesday.
Old Mutual (LSE: OML) and Prudential (LSE: PRU) lost 3.7% and 2.9% respectively, while Aviva (LSE: AV) was down 2.5%. RSA Insurance Group (LSE: RSA) lost nearly 2%.
Car insurer Admiral Group (LSE: ADM) and Standard Life (LSE: SL) did relatively well with a losses of 1.3%.
Private equity group 3i (LSE: III) posted marginal gains.
Small Cap Movers
Other notable movers among the small caps included agricultural sector focused investor Agriterra Limited (AIM: AGTA), which tumbled 8% and medical and technology sector focused investor Amphion Innovations (AIM: AMP) with a 12% climb.
Large and Mid Cap News
FTSE 100 turbine developer and manufacturer Rolls-Royce Group (LSE: RR.) said this morning in its interim management statement that trading continues to be “in line” with expectations.
Irish no-frills airline Ryanair Holdings PLC (LSE: RYA) reported a 15 percent year-on-year rise in passenger numbers for October 2009, to 6.16 million passengers from 5.35 million last October.
BP PLC (LSE: BP) and China National Petroleum Corporation (CNPC), announced today that they have signed a technical service contract with Iraq's state-owned South Oil Co (SOC) to expand production from the Rumaila oil field near Basra.
Small Cap News
Shares in Neuropharm Group (AIM: NPH) surged 45% higher this morning after the specialty pharmaceutical announced that it was in discussions which may lead to an offer for the company. Neuropharm is focused on neurodevelopmental disorders, including Fragile X Syndrome and Obsessive Compulsive Disorder and Autism.
Chinese based manufacturer of consumer condiment products and animal feeds China Food Company (AIM: CFC) is planning to raise £6.5 million through a three-year convertible loan to secure funds for further growth, while saying that trading remained in line with expectations, buoyed by recent growth in the Chinese economy.
Biocompatibles International PLC (LSE: BII) reported positive interim results from the ongoing combination therapy trial in primary liver cancer with Bayer healthcare Pharmaceuticals.
Kyrgyzstan operating gold miner Chaarat Gold Holdings (AIM: CHG) reported high grade sampling results from a surface drilling programme at one of the target areas of its flagship Chaarat project in Kyrgysztan, which the company said could have a significant impact on the economics of the project.
Dominion Petroleum Ltd (AIM: DPL) said it has appointed Andrew Cochran as chief executive officer with immediate effect.
Business communications specialist, SpiriTel (AIM: STP) announced its seventh acquisition in three years this morning, in the shape of Edge Solutions, a provider of data and voice services to around 200 corporate customers.
Food technology specialist Provexis (AIM: PXS) said the authorisation process by the European Commission for the use of a health claim for its Fruitflow anti-thrombotic technology was now in an advanced stage, expecting to make an announcement as soon as the process concludes.
US focused hydrocarbon production and development company Nighthawk Energy PLC (AIM: HAWK) said the Xenia gas pipeline at its Revere oil and gas project is now fully operational and flowing in excess of 650,000 cubic feet of gas per day from eight wells.
Broker Hanson Westhouse maintained its ‘buy’ recommendation and target price of 14 pence for Horizonte Minerals (AIM: HZM) after the Brazil focused gold miner completed an agreement with AngloGold Ashanti for a US$5.3 million exploration alliance, which the broker said provided it with an endorsement from one of the world’s major gold producers that it did have the expertise and experience to make new discoveries.
Biodegradable plastics manufacturer Plantic Technologies Limited (AIM: PLNT) is looking to expand its market reach with a new collaboration deal with German packaging supplier Kesko GmbH, which has a considerable presence in high-end packaging markets.
Equity research company Equity Development said copper and gold development group EMED Mining (AIM: EMED) was back in play thanks to the recovery in base and precious metal prices, valuing EMED’s stock at three times its current share price.
Aircraft components wholesaler Aero Inventory PLC (LSE: AI) is reviewing the positions of its top executives as the issue regarding the value of its stock is proving broader than anticipated last week, when trading in its shares was suspended after it flagged “certain issues regarding the valuation of a parcel of inventory acquired in the 2008 financial year.”
One of Britain’s largest coal producers, ATH Resources (LSE: ATH), announced today the completion of the group’s debt refinancing.
Links: Full news story
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