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  Home Retail Group, British Airways and ICAP lead FTSE 100 higher as Shell, Diageo and ABF decline
Reported by Proactive Investors on Wednesday, 4 November 2009 (on November 4, 2009)
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Overview: as was expected, the FTSE 100 rose 0.8% in early trade to reclaim most of the losses it posted yesterday, weighed down by declines in the financial, mining and energy sectors amid weakening commodities and considerable losses by partly nationalised bank RBS (LSE: RBS).
The market was off to a fast start today with most blue chips posting good gains in early trade with just a handful of fallers, non of which with the sole exception of supermajor Shell (LSE: RDBS) lost 1% or more.
Clothing retailers Marks & Spencer (LSE: MKS) and Next (LSE: NXT), which both released positive updates today with the former beating market expectations with quarterly profits and revenues and the latter upping its full year sales guidance, emerged atop the leaderboard with gains of over 6%.
Insurer Aviva (LSE: AV) also climbed 6% after reaffirming its full year profit guidance despite declines in pension and life sales in the UK.
Higher precious and base metal prices helped miners to a recovery from yesterday’s selloff with Kazakhmys (LSE: KAZ), Fresnillo (LSE: FRES) and Randgold Resources (LSE: RRS) leading the way with gains of over 5%. Home Retail Group (LSE: HOME), airline British Airways (LSE: BAY) and inter-dealer money broker ICAP (LSE: IAP) were other non-commodity stocks to make it to the leaderboard, advancing 5.5%, 5% and 4% respectively.
Pharmaceutical company GlaxoSmithKline (LSE: GKS) and food company Associated British Food (LSE: ABF) lost almost 1%, as did beverage group Diageo (LSE: DGE) after launching a US$500 million fixed rate long 5 year US Dollar denominated bond for “general corporate purposes.”
Stock market futures in the US rose, signalling a higher open on Wall Street ahead of Fed’s statement on interest rates, due to come out at 7 15 PM GMT.
Commodities
Oil prices rose today with December Brent Crude reaching US$78.39/barrel and US light, sweet crude for December delivery eclipsing US$80/barrel.
Oil and gas stocks were mixed. SUpermajors BP (LSE: BP) and Shell (LSE: RDSB) declined 0.5% and 1.3% respectively, while other FTSE 100 constituents rose.
Cairn Energy (LSE: CNE) led the way with a 4% gain, while Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) followed, advancing 3.3%. BG Group (LSE: BG) added 1%.
Midcaps also did well as Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) climbed 4% and 1.3% respectively. Dragon Oil (LSE: DGO) was flat.
Juniors didn’t show much movement in the morning with only a few notable exceptions.
North America focused oil & gas junior Pantheon Resources (AIM: PANR) outperformed the sector with a 6.3% climb, while Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) added almost 3%.
Mongolia-focused Petro Matad Ltd (AIM: MATD) was among the leading fallers with a loss of almost 9%, while energy investor Xtract Energy PLC (AIM: XTR) followed with a 4% slide.
Major mining stocks were on the rise, fuelled by increases in precious metal prices with Gold stopping just $10 short of US$1,100/oz, while Silver and Platinum reached US$17.39/oz and US$1,361/oz respectively.
Miners rally as gold reaches $1,090
Silver miner Fresnillo (LSE: FRES) was in the lead with a 6% climb, while gold miner Randgold Resources (LSE: RRS) and platinum producer Lonmin (LSE: LMI) followed, advancing 5.5% and 3.4% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) added 1.5%.
Midcaps followed suit as gold miner Petropavlovsk (LSE: POG), silver producer Hochschild Mining (LSE: HOC) and Aquarius Platinum (LSE: AQP) gained 5.2%, 5% and 4.3% respectively.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) led the sector with an 8.6% advance. Copper and gold miner EMED Mining (AIM: EMED) and Turkey focused gold miner Stratex International (AIM: STI), which released updates on its two gold projects in Turkey, followed with gains of over 6%.
Western Australia operating Norseman Gold (AIM: NGL) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) also did well, climbing 6% and 5% respectively.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) went in the opposite direction, sliding 6.5%.
Copper and Nickel rose, climbing to US$2.99/lb and US$8.25/lb respectively, while zinc recaptured the US$1/lb mark.
Copper, nickel and zinc rise to boost sector
Base metals focused stocks responded top the price increases with gains. Kazakhmys (LSE: KAZ) led the pack with a 5.5% climb, while Vedanta Resources (LSE: VED) advanced 4%. Eurasian Natural Resources (LSE: ENRC) climbed 3.5%, Xstrata (LSE: XTA) added 3%, while Antofagasta (LSE: ANTO) and Anglo American (LSE: AAL) tacked on 3% and 3% respectively.
BHP Billiton (LSE: BLT) and Rio Tinto (LSE: RIO) both advanced 1.4%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed the market with a 5.2% gain.
The small caps were off to a quiet start. Australia focused coking coal producer Caledon Resources (AIM: CDN) led the juniors with an 11% rally. Other notable movers included South Africa operating chrome miner Chromex Mining (AIM: CHX) and zinc mining and recycling specialist ZincOX (AIM: ZOX) with losses of 3%.
Banks, insurance, private equity
Most banks performed well with Standard Chartered (LSE: STAN), Royal Bank of Scotland (LSE: RBS) and Barclays (LSE: BARC) tacking on almost 3%. HSBC (LSE: HSBA) added slightly less than 1%, while Lloyds (LSE: LLOY) was flat, cooling off after yesterday’s strong performance when it outgained the rest of the market with a 3% climb.
Insurers also were in buying mode. Aviva (LSE: AV) was in the lead with a 5.5% gain. RSA Insurance Group (LSE: RSA) followed with a 2% advance, while Standard Life (LSE: SL) and car insurer Admiral Group (LSE: ADM) both added more than 1.5%.
Legal & General (LSE: LGEN) and Prudential (LSE: PRU) climbed 1.5%, while Old Mutual (LSE: OML) was flat.
Private equity group 3i (LSE: III) added 2.7%.
Large and Mid Cap News
FTSE 250 bus, rail and air services group Go-Ahead Group (LSE: GOG), has decided to enter the North American school bus market through a 50/50 joint venture with Cook-Illinois, a family owned and operated school bus contractor in the United States. Cook-Illinois has over 2,000 buses in 200 school districts operating in the Chicago area.
Clothing retailer Marks and Spencer Group (LSE: MKS) beat market expectations with a sales increase of 2.8% to £4.3 billion in the first half and profits of £298.3 million against the predicted £285 million, mostly driven by the strong performance of its international business where revenues and profits from M&S’ 315 stores in 41 territories climbed 12.2% and 21.1% respectively.
There was a plethora of interim management statements released this morning among the 350 largest companies listed on the LSE, but one of the most closely scrutinised was undoubtedly Taylor Wimpey (LSE: TW.) – one of Britain’s largest home builders.
Shares in Rightmove (LSE: RMV) were in demand this morning after the property search website reported “healthy growth” in revenues and earnings, driven by higher traffic to its website.
Pub chain and FTSE 250 constituent JD Wetherspoon (LSE: JDW) said it remained confident about the company’s prospects for the current financial year after total sales for the first quarter ending 25 October increased 4.5%, while like for likes were up 0.3%.
Small Cap News
Biocompatibles International PLC (LSE: BII) said its full year revenues would be closed to the upper end of the guidance after sales outpaced expectations in the third quarter, also expecting its net funds at the end of the year to top the projected £28 million.
Blackthorn Resources Limited (ASX: BTR) has reported encouraging drilling results from Phase 3B of the drilling program conducted by its Joint Venture partner BHP at the Mumbwa Project in Zambia.
Shares in mobile email and data synchronisation group Synchronica PLC (AIM: SYNC) were lifted by news that it received the first purchase order for the low cost mobile devices (LC devices) it is developing with third parties in a collaboration agreement. The group was not expecting sales of the devices until the 2010 calendar year.
Regal Petroleum PLC (AIM: RPT) said it was notified by Ceska Sporitelna, the Czech unit of Austria-based retail bank Erste Group Bank AG, that following share purchases on October 23, it is interested in 12,636,067 of the company's shares, representing 4 percent of the capital.
South Africa focused coal miner Strategic Natural Resources PLC (AIM: SNRP) has raised £650,000 via a placing of 6.5 million shares in the company to boost its operating liquidity in view of its plans to further grow the business by entering new promising markets.
Clean technologies developer Nviro Cleantech (AIM: NVR) has secured a €785,450 grant for its wood fibre recycling technology business Microrelease Limited to cover one quarter of the costs of development of a full scale industrial plant over 30 months starting on 1 November.
Stratex International PLC (AIM: STI) said a scoping study to identify key issues and ensure optimum fast-track development for the Inlice and Altintepe gold projects in Turkey is now complete, with recommendations by international consultancy Golder Associates being implemented.
Plexus Holdings PLC (AIM: POS), the oil and gas engineering services business that owns the POS-GRIP method of wellhead engineering, has extended by two years its framework agreement with Applied Drilling Technology International (ADTI), a turnkey drilling division of offshore drilling contractor Transocean Drilling UK Ltd.
Links: Full news story
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