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  Resolution, Legal & General and Severn Trent fall, but FTSE 100 eclipses 5,300 as commodities rise
Reported by Proactive Investors on Monday, 16 November 2009 (on November 16, 2009)
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Overview: the FTSE 100 beat pre-open expectations, rallying 1.2% in early trade on Monday as commodities were buoyant in response to increases in oil and metal prices, while commercial property stocks continued their climb. Platinum miner Lonmin (LSE: LMI), which also reported on its final results today, led the market with an 8% rally.
Gold miner Randgold Resources (LSE: RRS) also made it to the top three with a 5.5% gain. Base metals focused miners Xstrata (LSE: XTA), Rio Tinto (LSE: RIO), Antofagasta (LSE: ANTO) and Anglo American (LSE: AAL) followed with gains of over 3%.
Property companies Segro (LSE: SGRO) and Hammerson (LSE: HMSO), which was among the top performers in the index on Friday along with peers British Land (LSE: BLND), Land Securities (LSE: LAND) and Liberty International (LSE: LII), both gained 3%.
Energy services firm Amec (LSE: AMEC) also showed up on the leaderboard, climbing 3%.
Just two FTSE 100 constituents lost 1% or more in early trade. Insurance focused investor Resolution (LSE: RSL), which recently took the place of insurer Friends Provident in the index, and insurance company Legal & General (LSE: LGEN) declined 2.2% and 1.3% respectively.
Stock index futures in the US rose, pointing to a higher open on Wall Street ahead of monthly sales update, which is due in mid afternoon today. The Dow Jones Industrial Average is expected to open 0.6% up, the broader S&P 500 index is seen 0.84% higher, while the technology focused Nasdaq composite is projected to gain 0.55%.
Oil climbs to boost energy stocks
Oil prices incher higher in response to the gains in the stock markets. December Brent Crude improved to US$77.40/barrel, while US light, sweet crude for December delivery also stood at US$77.40/barrel.
All blue chip oil and gas companies rose in early trade. Petrofac (LSE: PFC) was in the lead with a 2.2% gain, while supermajors BP (LSE: BP) and Shell (LSE: RDSB) added 1.6% and 1.3% respectively. Tullow Oil (LSE: TLW) also tacked on 1.6% and BG Group (LSE: BG) advanced 1.1%.
Midcaps also did well, with the exception of Dragon Oil (LSE: DGO), which posted a small loss. Fellow mid tier oil companies Dana Petroleum (LSE: DNX) and Heritage Oil (LSE: HOIL) both added 1.5%.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was in the lead with an 8% gain after reporting gas shows from a well currently drilled at its Logbaba gas and condensate project in Cameroon.
Kazakhstan operating Max Petroleum (LSE: MXP) and US focused junior Empyrean Energy (AIM: EME) followed with gains of 6% and 4.5% respectively.
Energy investor Xtract Energy PLC (AIM: XTR), which reported its final results today, and Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) went in the opposite direction, shedding 5% and 4% respectively. Europe focused oil and gas developer Ascent Resources (AIM: AST) and Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico, also were in decline, retreating 3%.
Gold reaches record highs
Precious metals were buoyant with gold reaching new highs at US$1,128/oz and platinum breaking through the $1,400 mark to reach US$1,419/oz. Silver climbed to US$17.77/oz.
Lonmin (LSE: LMI) led the way with an 8% rally. Randgold Resources (LSE: RRS) and silver miner Fresnillo (LSE: FRES) advanced 5% and 2.5% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose 1.2%.
Midcaps also were in demand with gold miner Petropavlovsk (LSE: POG) adding 3%, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) climbed 2.7% and 1% respectively.
Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) and Uzbekistan focused gold miner Oxus Gold (AIM: OXS) led the small caps with gains of over 6%.
Iran focused gold explorer Persian Gold (AIM: PNG) followed, tacking on 5%. South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) also was in demand, climbing 4.5%. Africa operating gold miner GMA Resources (AIM: GMA), Brazil focused gold miner Horizonte Minerals (AIM: HZM), South American based explorer Mariana Resources (AIM: MARL) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) all gained over 3%.
Commodity asset development company Mercator Gold (AIM: MCR) and Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) emerged as the leading fallers in the sector, sliding 13% and 11% respectively.
Miners buyoyant as copper and nickel climb
Base metals also rose to recoup some of their recent losses. Copper reached US$3.03/lb, nickel improved to US$7.41/lb and zinc climbed to US$0.99/lb.
Xstrata (LSE: XTA) led the sector with a gain of almost 6%, while Rio Tinto was up 5.2%. Antofagasta (LSE: ANTO), Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) followed, advancing 4%, 3% and 2% respectively. Eurasian Natural Resources (LSE: ENRC) and Kazakhmys (LSE: KAZ) also climbed 2%, while Vedanta Resources (LSE: VED) added almost 1.5%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, tacking on 1.4%.
Iron ore focused investor Red Rock Resources (AIM: RRR) led the juniors with a 5% gain. South American focused junior miner Herencia Resources (AIM: HER) and tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) came close, climbing about 4.5%. Russia focused copper and nickel miner Amur Minerals (AIM: AMC) rose 3%.
Indonesia focused copper producer Finders Resources (AIM: FND) headed in anther direction, sliding 5%.
Banks, insurance, private equity
HSBC (LSE: HSBA) led the banking sector with a 1.8% gain. Barclays (LSE: BARC) added 1%, while Standard Chartered (LSE: STAN) rose marginally. Lloyds (LSE: LLOY) was in decline with a marginal gain, as was fellow part-nationalised bank Royal Bank of Scotland (LSE: RBS), which moved down 1%.
Prudential (LSE: PRU) led the insurers, rising 1%. Sector peers Standard Life (LSE: SL), Old Mutual (LSE: OML) and Aviva (LSE: AV) posted small gains, as did car insurer Admiral Group (AIM: ADM). RSA Insurance Group (LSE: RSA) declined marginally, while Legal & General Group (LSE: LGEN) lost nearly 2%. Private equity group 3i (LSE: III) climbed 3%.
Small Cap Movers
Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS), which gained 9.5% and mobile email and data synchronisation group Synchronica PLC (AIM: SYNC), which added 7% after winning its 12th order for its mobile email product Mobile Gateway this year.
Large and Mid Cap News
FTSE 100 Engineering firm, Rolls-Royce (LSE: RR.) announced two new contract wins to supply it Trent aviation engine to international airlines – the combined contracts are worth almost $2 billion in new business. In the larger of the two deals, Rolls-Royce won an order worth $1.5 billion to supply Trent 700 engines to power 20 Air China Airbus A330 aircraft. Separately the second deal with Ethiopian Airlines is for $480m.
UK house builder Persimmon plc (LSE: PSN) released its third quarter Interim Management Statement for the period from July to 16 November 2009. According to Persimmon the company ‘remains strong’ after a period in which the group’s sales and debt position is ahead of expectations.
UK listed maintenance and building service company, Interserve released its Interim Management Statement (‘IMS’) for the period since July. According to Interserve (LSE: IRV), it has benefitted from a ‘strong performance’ in its Middle-East operations and an ‘ongoing stability’ in the public and utilities sectors in the UK. Overall the company said that it is trading in-line with expectations.
Small Cap News
Empyrean Energy (AIM: EME) reported further progress on the highly anticipated Quinn 3H well, which has already been the subject of intense speculation amongst investors after the company reported encouraging results from the well recently.
Provider of software and IT services Advanced Computer Software (AIM: ASW) has acquired Derby-based Healthy Software Ltd (HSL) in a cash and share deal worth £0.9 million to build on and complement its own solutions targeting the healthcare market.
Energy investor Xtract Energy PLC (AIM: XTR) reported on the results for the full year ending 30 June, saying it has swung to losses as revenues narrowed amid “dramatically changed” market conditions, while reaffirming its focus on investments that are likely to pay off sooner to reduce cash burn.
Biopharma group Lipoxen PLC (AIM: LPX) said it has signed a collaboration deal with Russian private research-based pharmaceutical company Pharmasynthez ZAO to apply Lipoxen's ImuXen and PolyXen proprietary technologies to a broad range of six drug and vaccine candidates in collaboration with Pharmsynthez.
IdaTech (AIM: IDA) and ACME Group (‘ACME’) announced that they had agreed to alter a previously announced supply agreement to a distribution agreement for IdaTech’s ElectraGen™ back-up power products, which typically use a methanol-water mix as a fuel, but can also run on natural gas.
Shares in Victoria Oil & Gas (AIM: VOG)(‘VOG’) were in demand after the Africa and FSU operating oil and gas junior released an update from its Logbaba gas and condensate project in Cameroon, reporting gas shows in the La-105 well.
Amphion Innovations PLC (AIM: AMP) investee company Myconostica Ltd said it has won this year’s award for ‘Innovation in Diagnostics Project of the Year’ from BioNoW, the cluster support group for the Northwest of England's biotechnology, pharmaceutical and healthcare industry.
South American focussed gold producer and mining developer Mineral IRL (AIM: MIRL) confirmed that it would be pushing forward with infill drilling at the Ollachea Gold Project in southern Peru after it released a scoping study considering the viability of the project as an underground mining operation.
Aminex PLC (LSE: AEX) said it has farmed out a 12.5 percent interest in the Likonde-1 well in Tanzania to Solo Oil PLC (AIM: SOLO). Likonde-1 is the first well scheduled to be drilled on Aminex's Ruvuma Production Sharing Agreement (PSA) in southern Tanzania with spudding likely to occur in about two months, the precise date depending on rig move logistics. A rig contract has been signed.
South America focused explorer Mariana Resources (AIM: MARL) said it has closed the placing of shares prived at 13 pence each to institutional and other investors it announced a week ago, raising £2.95 million, more than the £2.6 million originally envisaged.
Mobile email and data synchronization group Synchronica PLC (AIM: SYNC) has landed its fifth order from an African operator for its mobile email product Mobile Gateway, its twelfth contract announced this year.
Links: Full news story
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