FTSE 100 poised to extend streak as miners and financials gain, US stocks open flat

Overview: the FTSE 100 is close to extending its winning streak to six sessions after gaining 0.3% in the morning and afternoon trade today as financial stocks advanced, while miners bounced back after showing weakness at the end of last week.
Royal Bank of Scotland (LSE: RBS) was the top performing blue chip today, emerging atop the leaderboard with a 4.3% gain. Base metal miners Vedanta Resources (LSE: VED), Kazakhmys (LSE: KAZ) and ENRC (LSE: ENRC) followed, advancing 3.5%. Distribution and outsourcing group Bunzl (LSE: BNZL), which reported on its full year results today, also tacked on 3.5%.
Pharmaceutical company GlaxoSmithKline (LSE: GSK) was the only FTSE 100 constituent to lose more than 2%, shedding 2.5%. Retailers Marks and Spencer (LSE: MKS) and Next (LSE: NXT) and London Stock Exchange Group (LSE: LSE) followed with losses of over 1.5%. Tour company Thomas Cook (LSE: TCG) and British American Tobacco (LSE: BATS) were down 1.3%. Fashion house Burberry (LSE: BRBY), satellite communications group Inmarsat (LSE: ISAT) and food manufacturer Unilever (LSE: ULVR) were down 1%.
US stocks opened flat today with the Dow Jones Industrial Average and the broader S&P 500 index staying around the opening levels. The technology heavy NASDAQ composite slid 0.1%.
Commodities
Movements in the currency markets made an impact on crude oil prices today with a weaker US dollar sending US crude above US$80/barrel, while April Brent Crude was at US$78.36/barrel.
Crude was further lifted by the ongoing strike by Total’s (NYSE: TOT) refinery workers in protest against the shutdown of the company’s Dunkirk facility, which could spread to other refineries and potentially cause a supply shortage.
Meanwhile, situation in the OPEC’s (Organization of Petroleum Exporting Countries) second largest supplier Iran has also heated up after the country said it planned to build two new uranium enrichment facilities and the United States pledged to increase pressure on Iran to curb its nuclear program.
More bullish data came from China, which reported it has processed 29% more crude in the month of January than a year before, signalling an increase in demand form the world’s second largest energy consumer.
Crude got further support from global stock markets, which kept rising with the FTSE 100 posting further gains today in a bid to extend its winning streak to six sessions.
Blue chip oil and gas producers showed little movement today. Tullow Oil (LSE: TLW) was in the lead with a gain of nearly 1%. Cairn Energy (LSE: CNE) rose marginally, while BG Group (LSE: BG) and supermajors BP (LSE: BP) and Shell (LSE: RDSB) were flat.
Petrofac (LSE: PFC) climbed 1.2%, while fellow oil and gas engineering firm Amec (LSE: AMEC) posted a small decline.
Midcaps did slightly better. JKX Oil & Gas (LSE: JKX) and Premier Oil (LSE: PMO) were the top performers with gains of 1.5% and 1.3% respectively. Dana Petroleum (LSE: DNX) and Melrose Resources (LSE: MRS) added nearly 1%, while Dragon Oil (LSE: DGO) posted an insignificant gain.
Heritage Oil (LSE: HOIL) was flat, while Salamander Energy (LSE: SMDR) and Soco International (LSE: SIA) posted small losses.
Service companies were in demand with Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) climbing 2.5% and 1.7% respectively.
Oil and gas company with assets in Iraq, Syria and Gulf of Mexico, Gulfsands Petroleum (AIM: GPX) topped the small caps with a 4.5% gain.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) headed in the opposite direction, sliding 6.2%, while Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) and Irish oil and gas exploration company Petroceltic International (AIM: PCI) dropped 4%.
Gold, silver and platinum climb
Gold returned to US$1,125/oz this morning after the US dollar showed weakness, though failed to hold on to this level, sliding down to US$1,120/oz later after the European currency fell against the greenback on renewed jitters over Greece’s debt situation.
Gold moves inversely to the US dollar, representing a riskier investment alternative.
The US dollar remained under pressure following last week’s move by the Federal Reserve, which hiked the discount rate, which it charges banks for emergency loans, by 25 basis points to 0.75%, which was interpreted as a sign that the anticipated tightening of US monetary policy could come sooner than expected.
Fed Chairman Ben Bernanke is set to appear before the US Congress this Wednesday to deliver his annual Humphrey-Hawkins testimony, which will be closely watched following the discount rate increase.
Meanwhile, the outlook for Greece’s debt crisis was further muddied today to put pressure on the euro. The European Commission said there was no plan to put together a €20-25 billion bailout package for Greece and Germany, which was reportedly preparing an aid package for the debt laden country, said it was undecided on the issue.
Greek Prime Minister George Papandreou told the BBC today that his country was not looking for financial, but rather for political support.
Other precious metals advanced with silver and platinum reaching US$16.42/oz and US$1,536/oz respectively.
Most mining stocks were on the rise today. Midcap silver producer Hochschild Mining (LSE: HOC) was an exception, shedding almost 1%.
Silver and gold miner Fresnillo (LSE: FRES) was in the lead among the blue chips with a 2.3% advance. Gold miner Randgold Resources (LSE: RRS) and platinum producer Lonmin (LSE: LMI) both added 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
In the FTSE 250, gold miner Petropavlovsk (LSE: POG) rallied 2.7%, while Aquarius Platinum (LSE: AQP) was up 1%.
Stellar Diamonds (AIM: STEL) led the juniors with a 13% surge on its first day of trading. UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) and Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) followed, climbing 9.5% and 7.5% respectively.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) advanced 5% and South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) and Gemfields Resources (AIM: GEM) both added 4.5%.
Commodity asset development company Mercator Gold (AIM: MCR) and Turkey focused gold miner Ariana Resources (AIM: AAU) were in decline with losses of about 4%.
Miners rally despite weaker copper and nickel
Base metals were in decline today as copper and nickel dropped to US$3.32/lb and US$9.24/lb, while zinc slid to US$1.03/lb.
Mining stocks advanced despite the weakness in metal prices. Eurasian Natural Resources (LSE: ENRC), Kazakhmys (LSE: KAZ) and Vedanta Resources (LSE: VED) were in the lead with gains of about 3.5%. Rio Tinto (LSE: RIO) and Antofagasta (LSE: ANTO) added 2%, while Xstrata (LSE: XTA) was up 1.5%.
Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) rose marginally.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was in correction following last week’s rally, shedding 4%.
Juniors showed little movement with only a few exceptions. Tunisia focused metal miner Maghreb Minerals (AIM: MMS) declined 12.5%, while iron ore focused investor Red Rock Resources (AIM: RRR) was down 4.5% and Australia focused coking coal producer Caledon Resources (AIM: CDN) slid 3.8%.
Banks, insurance, private equity
Royal Bank of Scotland (LSE: RBS) led the banking stocks with a 4% climb. Lloyds (LSE: LLOY) and Barclays (LSE: BARC) added 2.5%, while Standard Chartered (LSE: STAN) rose 2% and HSBC (LSE: HSBA) climbed 1.3%.
Old Mutual (LSE: OML) was the top performing insurer with a 2.4% gain. Prudential (LSE: PRU) followed, tacking on 1.8%. Aviva (LSE: AV) and Legal & General (LSE: LGEN) added nearly 1%, while Standard Life (LSE: SL) and Admiral Group (LSE: ADM) were flat.
RSA Insurance Group (LSE: RSA) was at the bottom of the pile with a 1% loss.
Private equity group 3i (LSE: III) tacked on nearly 1%.
Home credit and motor finance specialist S & U PLC (LSE: SUS) did well, gaining 5%.
Small Cap Movers
Other notable movers among the small caps included developer of CAD and image analysis software Medicsight (AIM: MDST), which lost 10% on no news.
Large and Mid Cap News
Associated British Foods PLC (LSE: ABF) expects interim results to show a strong increase in revenue with growth achieved in all segments, with operating profit substantially higher than in the corresponding period last year in all segments except Agriculture, where trading last year benefited from unusually high volatility in commodity prices.
Asia focused oil and gas company Salamander Energy (LSE: SMDR) has spudded the Bang Nouan-1 exploration well in the Savannakhet area of Lao People’s Democratic Republic (PDR). Bang Nouan-1 will be drilled to approximately 3,700m true vertical depth. It is forecast to take approximately 75 days to complete on a dry-hole basis.
In the company’s full-year results, Hammerson (LSE: HMSO) chairman John Nelson said 2009 was a year of intense activity in volatile conditions. For the twelve months ended 31 December, adjusted and recurring group pre-tax profit increased by 14%, up £16m to £130m.
Small Cap News

African Aura Mining (TSX-V: AUR, AIM: AAAM) has announced that its 31.8% owned Stellar Diamonds (AIM: STEL) was admitted to trading on the AIM market of the London Stock Exchange today, which injected a fresh £5 million into Stellar.
Mariana Resources Ltd (AIM: MARL) has reported the initial exploration results from its Los Amigos joint venture with Hochschild Mining (LSE: HOC), located in Santa Cruz, Argentina. The company said that encouraging exploration results, including geochemical sampling and an airborne magnetic survey, warrant further exploration on the 13,455 hectares in 2010.
Phaunos Timber Fund Limited (AIM: PTF) has completed its investment of NZ$167 million, or US$117.6 million, in New Zealand’s Matariki Forestry Group to become the largest shareholder in the manager of over 132,000 ha (hectares) of productive timberland.
Ascent Resources (AIM: AST) has stocked up its funds for ongoing work programmes at its projects through the sale of its 45% interest in Perazzoli Drilling for €1.85 million, while retaining the advantages that were provided by the ownership of the Italian drilling contractor through a five year service alliance.
Gemfields (AIM: GEM) announced the discovery of a 6,225 carat emerald at its Kagem mine in Zambia. The emerald was recovered during normal mining operations and it is currently being examined by Gemfields' experts to establish a clearer understanding of its value and significance.
Petro Matad Ltd (AIM: MATD) has issued 13.7 million shares to the European Bank for Reconstruction and Development (EBRD), representing the first US$3 million tranche of the EBRD’s US$6 million subscription under the agreement announced in December last year.
Animalcare Group (AIM: ANCR) said sales in the six months to 31 December grew across all three product categories, making for a 15% increase in total revenues to £8.93 million, while sales in the second half have been in line with expectations.
Spectrum Interactive (AIM: SIN) has signed a new five year contract-extension with London City Airport to provide internet desks and payphones. Spectrum has operations in 24 UK airports, more than 70 motorway services, and also in 40 other locations including marinas, bus and coach stations across the UK.
Hartest Holdings (AIM: HTH) shares fell 20%, as the board confirmed that its 8-month-long offer talks with privately-owned Delta Controls Ltd have been terminated. Delta’s indicative offer price reached up to 68.33p per share and the Hartest board said it felt that the price represented reasonable value, however from the outset Hartest's largest shareholder, Peter Gyllenhammar, with 29.95% stake, has clearly expressed that he was not willing to accept the proposal.
Egdon Resources (AIM: EDR) has signed commercial agreements for the sale of the Kirkleatham Gas Field production to SembCorp’s (SINGAPORE SGX: U96) Utilities unit, which operates the Wilton International manufacturing site in Teesside.

Alliance Pharma (AIM: APH) has completed the acquisition of Cambridge Laboratories it announced earlier this month. The company expects the deal, which adds 18 new prescription products to Alliance’s portfolio, to be significantly earnings enhancing in the current financial year. Cambridge’s commercial manager Peter Butterfield has also been appointed to the Alliance Pharma board.
Pangea Diamondfields (AIM: PDF) received a muted response this morning to news that it would be merging with Oslo listed Swedish exploration and mining group IGE, which is focused diamonds, nickel and gold.

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