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 FTSE 100 down 0.5%, Dow Jones, S&P 500 and NASDAQ open flat
Reported by Proactive Investors on Friday, 30 July 2010 (on July 30, 2010)
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*Overview:* the FTSE 100 declined 0.5% today after the US GDP update showed a slowdown in growth rate to an annualized 2.4%, while the University of Michigan consumer confidence index declined to 67.8 in July from 76 in June, which was better than the previous reading of 66.5 for the current month.
*United Utilities (LON:UU)* led the blue chips with a 4.5% advance, while fellow water company and oil and gas producer *BG Group (LON:BG) *with gains of just over 2%. Airline *British Airways (LON:BAY) *and gold miner *Randgold Resources (LON:RRS)* tacked on nearly 2%. Publisher *Reed Elsevier (LON:REL)* extended yesterday’s gains by 1.4%, while medical devices manufacturer *Smith & Nephew (LON:SN) *added 1%.
Pharmaceutical company *Shire (LON:SHP) *slid to the bottom of the pile with a 2.3% loss. Packaging group* Rexam (LON:REX)* dropped 2%, while commercial property company *Segro (LON:SGRO)*, defence and aerospace systems manufacturer *BAE Systems (LON:BA)*, hedge fund manager* Man Group (LON:EMG)* and published *Pearson (LON:PSON)* lost just over 1.5%, as did retailer *Tesco (LON:TSCO) *and specialist banking group* Investec (LON:INVP)*.
The *Dow Jones Industrial Average*, the broader *S&P 500* index and the technology heavy NASDAQ *composite were unchanged in early trade.*
Commodities
Oil prices retreated today after equity markets switched to selling mode after a US GDP update showed a decline to a 2.4% growth rate in Q2 from 2.7% in Q1, which was slightly below the projected 2.5%.
Crude oil futures have been in decline, pressured by mixed economic data and signs of declining demand in the US reflected in this week’s inventories reports.
The University of Michigan’s consumer confidence index for July will also be released today.
September *Brent Crude* declined to US$76.48/barrel, while *US light, sweet crude *for September delivery slid to US$77.47/barrel.
Blue chip oil and gas producers were in decline today with the sole exception of *BG Group (LON:BG)*, which managed to add 1%.
*Tullow Oil (LON:TLW)* was down 1.6%, while *Cairn Energy (LON:CNE) *posted a small loss.
Supermajprs* BP (LON:BP)* and *Shell (LON:RDSB) *shed 1.3% and 1% respectively.
*Petrofac (LON:PFC)* lost nearly 2%, while another oil and gas engineering firm *Amec (LON:AMEC)* was sitting just below the opening level.
Most midcaps declined with the exception of *Dana Petroleum (LON:DNX)* and *Dragon Oil (LON:DGO)*, which posted small gains.
*Heritage Oil (LON:HOIL)* shed less than 1%. *Soco International (LON:SIA)* declined 1.4%, while *JKX Oil & Gas (LON:JKX)* and *Premier Oil (LON:PMO) *dropped 1.7%.
*Melrose Resources (LON:MRS) *retreated 3.5%, while *Salamander Energy (LON:SMDR)* was at the bottom of the pile with a loss of nearly 7%.
Services companies *Wood Group (LON:WG)* and *Wellstream Holdings (LON:WSM) *each lost just over 2%.
Mongolia-focused *Petro Matad Ltd (LON:MATD )* rallied 21% to take the lead in the sector. Europe focused oil and gas developer *Ascent Resources (LON:AST)* also did well, climbing 6%.
North America focused oil & gas junior* Pantheon Resources (LON:PANR)* and *Aminex (LON:AEX)* slipped 11% and 6% respectively.
Gold reaches $1,170
Gold improved today, largely due to an increase in physical demand from Asian jewellers and bargain hunters, which were taking advantage of the yellow metal’s low prices of just over US$1,161/oz.
After nearly reaching US$1,200/oz, gold plummeted early this week as fears over Europe’s debt situation subdued in the wake of Friday’s results of the stress test with just 7 out of 91 European banks failing to show they would withstand another crisis. This news prompted the Basel Committee on Banking Supervision to relax its liquidity and capital requirements in its draft Basel III reform.
*Gold* climbed to US$1,171/oz today. *Silver* followed, rising to US$17.85/oz, but *platinum *declined to US$1,555/oz.
Major mining stocks were mixed. Gold miner *Randgold Resources (LON:RRS) *added 1%, while platinum miner *Lonmin (LON:LMI) *and *African Barrick Gold (LON:ABG) *stood just above the opening level.
Silver miner *Fresnillo (LON:FRES)* posted a small loss, as did specialty chemicals firm* Johnson Matthey (LON:JMAT)*.
Gold miner *Petropavlovsk (LON:POG)* added less than 1%, while fellow midcaps *Aquarius Platinum (LON:AQP)* and silver producer* Hochschild Mining (LON:HOC) *declined 1%.
Most junior companies were little moved today. Western Australia operating* Norseman Gold (LON:NGL)* and gemstone producer *Gemfields (LON:GEM)* shed 6.5% and 5% respectively.
Miners mixed as base metals hold steady
*Copper* and *zinc* were flat at US$3.26/lb and US$0.89/lb, while *nickel* improved to US$9.35/lb.
Base metal miners were mixed. *Anglo American (LON:AAL) *added 1%, while *Eurasian Natural Resources (LON:ENRC) *and *Kazakhmys (LON:KAZ) *posted small gains.
*Antofagasta (LON:ANTO)*, *BHP Billiton (LON:BLT)* and *Rio Tinto (LON:RIO)* were sitting just below the opening level.* Vedanta Resources (LON:VED)* and* Xstrata (LON:XTA)* declined 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, *Ferrexpo (LON:FXPO)* declined 4%.
Tunisia focused metal miner *Maghreb Minerals (LON:MMS) *and copper and nickel explorer *Regency Mines (LON:RGM) *slipped 10% and 7% respectively. *Finders Resources (LON:FND) *moved down 5.5%.
South American focused junior miner *Herencia Resources (LON:HER) *did better, advancing 6%.
Banks, insurance private equity
Banks didn’t show much movement today. *Barclays (LON:BARC)*, *Lloyds (LON:LLOY)* and *Royal Bank of Scotland (LON:RBS)* added less than 1%, while *Standard Chartered (LON:STAN) *and *HSBC (LON:HSBA)* were in the red with marginal losses.
Insurance stocks were out of favor today with all major companies turning negative.
*Old Mutual (LON:OML)*, *Admiral Group (LON:ADM)* and *Standard Life (LON:SL) *lost nearly 1%, while *Aviva (LON:AV)* was at the bottom of the pile with a 2% decline. *Prudential (LON:PRU) *and* RSA Insurance Group (LON:RSA)* posted small losses.
Private equity group *3i (LON:III) *dropped 1.3%.
Small Cap Movers
Other notable movers among the small caps included environmental science and technology company *Accsys Technologies (LON:AXS)*, novel eco-technology company for human, animal and environmental health *TyraTech (AIM: TYR)* and offshore marine renewables development company *SeaEnergy (LON:SEA)* with gains of over 5% and South Africa operating power producer *IPSA Group (LON:IPSA)*, which slipped 12%.
Small Cap News
*United Business Media Ltd (LON:UBM)* said it has acquired the Shanghai International Children-Baby-Maternity Products Expo (CBME) and related businesses on behalf of its UBM Asia division for up to US$16.1 million.
Training software group *SimiGon (LON:SIM) *announced that chief financial officer Haim Yatim, will be leaving the company by the end of October to pursue other interests and has resigned from the board with immediate effect.
Western Australia operating *Norseman Gold (LON:NGL, ASX: NGL) *reported higher production and realized gold prices at lower production costs during the fourth quarter to end-June 2010, which helped it post EBIT (earnings before interest and taxes) of A$0.8 million from its flagship Norseman gold project.
Copper and gold miner *EMED Mining (LON:EMED)* has moved closer to achieving its ambitious goal of restarting production from the Rio Tinto copper mine in Spain in 2011 during this quarter, reaching “significant milestones” in the permitting process and securing access to the grid.
*Cinpart PLC (LON:CINP)* said all resolutions put to today’s AGM were passed, including the proposed name change to Active Energy Group PLC, and it expects trading under the new name and the new code AEG to begin on August 2 2010.
*Alliance Pharma’s (LON:APH)* second largest shareholder, Nigel Wray, has further increased his stake in the company by buying 3.15 million shares in the group yesterday, taking his holding to 31,119,995 shares, equivalent to 13.38 percent of the capital.
Former cement operator *Prosperity Mineral Holdings (LON:PMHL)* has made another step in transforming itself into a Chinese real estate focused company in line with the change in strategy announced in February, announcing the details of the purchase of the Guangzhou properties flagged in June, including that it will pay £70.1 million for assets valued at £177 million.
Broker Edison Investment Research has published a note on* Goldplat (LON:GDP)* in response to the company’s securing of the mining lease for its Kilimapesa Hill gold project in Kenya, leaving the issuance of a mining right number from the director of survey the only remaining formality on its way to commencing commercial production.
European Nickel *European Nickel (LON:ENK) *reported on the progress made during the quarter ending June30 2010, which saw the completion of the merger with Rusina Mining NL.
Mongolia-focused *Petro Matad Ltd (LON:MATD) *said wireline logs from the Davsan Tolgoi-1 (DT-1) exploration well in Block XX indicate indicate good log porosities, 25 percent average on average, and permeabilities concentrated in six sandstone zones, with a total net pay of 12 metres. Further analysis needs to be undertaken, but the logs confirm the promising initial results.
*London Mining PLC (LON:LOND)* said it has entered into a joint venture with am unspecified Chinese and Chilean based partner to take advantage of several iron ore opportunities in the Atacama region of northern Chile.
Large and Mid Cap News
*HomeServe PLC (LON:HSV)* said continued to grow and develop its membership businesses in the first four months of the financial year, with increasing policy numbers and retention rates remaining high across all territories.
*Melrose Resources PLC (LON:MRS)* announced an exploration discovery in the Galata block offshore Bulgaria, a new agreement to farm-down its interests in the Rhone Maritime concession offshore France and the commencement of seismic acquisition operations in the South East Mansoura concession in Egypt.
*Dana Petroleum iPLC (LON:DNX) *the Fin-1X exploration well has discovered a new oil field, in the North Zeit Bay Production Sharing Contract (PSC) area onshore in the Gulf of Suez, in Egypt. This follows the discovery of the Lorcan oil field, made just last month in the same PSC area.
Links: Full news story
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