National Grid, BT, Man Group, Diageo and TUI Travel rise, but FTSE 100 slips as commodities decline

Overview: the FTSE 100 declined 0.4% today to wipe out yesterday’s gains, weakened by disappointing European GDP data and an unexpected decline in the University of Michigan consumer sentiment index.
Today’s update from the EU showed Q4 GDP growth of just 0.1% for both the 16 member euro zone and 27 member EU. Europe’s largest economy Germany was stagnant in Q4, while Italy’s GDP was down 0.2% quarter on quarter, Spain posted a 0.1% decline and debt laden Greece’s GDP shrank 0.8%. France was a bright spot with 0.6% growth.
Overall, however, the results disappointed investors to further weaken Europe’s single currency, which has been under pressure due to the debt problems surrounding a number of euro zone countries, including Greece, Spain and Portugal. To add to the bad news, euro zone industrial output for December fell 1.7% from November and 5% year on year.
Later in the day, it was reported that the University of Michigan consumer sentiment index declined to 73.7 in February from 74.4 in January, while an increase to 75 was expected.
National Grid (LSE: NG) led the blue chips in the UK with a 2.3% climb. Telecom group BT (LSE: BT.A), United Utilities (LSE: UU), hedge fund manager Man Group (LSE: EMG) and pharmaceutical company GlaxoSmithKline (LSE: GSK) added more than 1.5%. Consumer goods company Reckitt Benckiser (LSE: RB), tour company TUI Travel (LSE: TT), beverage group Diageo (LSE: DGE) and British American Tobacco (LSE: BATS) were up 1.3%-1.4%. Food manufacturer Unilever (LSE: ULVR) added 1%.
Mining and financial stocks were the leading fallers in the FTSE 100. Airline British Airways (LSE: BAY) was at the bottom of the index with a 4.5% loss.
US stock fell sharply this morning. The Dow Jones Industrial Average plummeted 1.3%, while the broader S&P 500 index was down 1% and the technology heavy NASDAQ composite declined 0.7%.
Commodities
Oil prices retreated to wipe out most of yesterday’s gains ahead of today’s closely watched inventories update from the US Energy Information Administration (EIA).
Back on Tuesday, an inventories update from API (American Petroleum Institute) showed an unexpectedly high increase in crude inventories of 7.195 million barrels last week, while a Platts survey projected a 2 million barrel rise. Gasoline stocks were up 1.552 million barrels, distillate stocks declined by 1.53 million barrels, while refinery utilization rate also fell, moving down from 78% to 77%, reflecting lower demand.
Crude prices declined further after the US Dollar climbed against the euro on today’s disappointing euro zone and European Union Q4 GDP data.
April Brent Crude stood just 6 cents short of US$73/barrel, while US light, sweet crude for March delivery slid to US$74.03/barrel on the New York Mercantile Exchange.
All blue chip oil and gas producers declined today with the sole exception of BP (LSE: BP), which was sitting just above the opening level. Fellow supermajor Shell (LSE: RDSB) posted a marginal gain, as did BG Group (LSE: BG), Cairn Energy (LSE: CNE) and Tullow Oil (LSE: TLW).
Engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) slipped 1.2% and 2.4% respectively.
Midcaps also were in selling mode. JKX Oil and Gas (LSE: JKX) was at the bottom with a 4.2% fall. Dana Petroleum (LSE: DNX) and Salamander Energy (LSE: SMDR) followed with losses of 3% and 2% respectively, while Heritage Oil (LSE: HOIL) was down 1% and Premier Oil (LSE: PMO) and Soco International (LSE: SIA) lost less than 1%.
Melrose Resources (LSE: MRS) went against the tide with a 2.2% climb, while Melrose Resources (LSE: MRS) rose marginally.
Services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) were down 2.8% and 1.5% respectively.
Mongolia-focused Petro Matad Ltd (AIM: MATD) was among the top performers in the sector with a 8.4% climb.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) was in decline with a 4% loss.
Gold back to $1,080 as US Dollar gains
Gold retreated back to US$1,080/oz on Friday after nearly recapturing the US$1,100/oz mark yesterday as the US Dollar stiffened against the euro on disappointing GDP data from the European Union.
As a result, the US Dollar climbed to nine month highs against the euro, while futures for the US Dollar Index rose to 80.73 on the ICE Exchange.
Gold, which is seen as a Dollar hedge and moves inversely to the greenback, fell back to yesterday's levels after the data was released.
Other precious metals followed as silver and platinum dropped to US$15.36/oz and US$1,499/oz respectively.
Mining stocks were in decline today. Silver and gold miner Fresnillo (LSE: FRES) was the heaviest faller in the sector in the FTSE 100 with a loss of nearly 3%. Fellow blue chips gold miner Randgold Resources (LSE: RRS) and platinum producer Lonmin (LSE: LMI) shed 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) went against the tide, posting a small gain.
Midcaps followed the trend with Aquarius Platinum (LSE: AQP) sliding to the bottom with a 4% decline. Silver producer Hochschild Mining (LSE: HOC) lost 1.4%, while gold miner Petropavlovsk (LSE: POG) declined marginally.
African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) led the juniors with a 13.5% rally.
Most other small cap miners were in decline. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Africa focused gold miner Pan African Resources (AIM: PAF) were down 7%, Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) shed 6% and Turkey focused gold miner Ariana Resources (AIM: AAU) fell 4.5%.
Base metals fall as copper and nickel retreat
Copper and nickel followed precious metals, retreating to US$3.07/lb and US$8.35/lb respectively. Zinc declined to US$0.97/lb.
Most miners were in decline today. Vedanta Resources (LSE: VED) led the retreat with a 2.3% loss. Anglo American (LSE: AAL) lost 1.6%, while Antofagasta (LSE: ANTO), Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA) dropped 1.4%.
BHP Billiton (LSE: BLT) was flat, while Eurasian Natural Resources (LSE: ENRC) outperformed its peers with a 1% gain.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) rallied for the second day in a row, climbing 7%.
Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and cement operator Prosperity Mineral Holdings (AIM: PMHL) bucked the trend, climbing 4.6% and 3.7% respectively.
Copper and nickel explorer Regency Mines (AIM: RGM) moved with the sector, shedding 5.3%.
Banks, insurance, private equity
Most financial stocks were in selling mode today. Part-nationalised Lloyds (LSE: LLOY) was the biggest faller in the banking sector with a 3.5% loss. Fellow part-nationalised bank Royal Bank of Scotland (LSE: RBS) declined 2%, as did Standard Chartered (LSE: STAN). Barclays (LSE: BARC) and HSBC (LSE: HSBA) were down 2.5% and 1.2% respectively.
Legal & General (LSE: LGEN) was at the bottom of the insurance sector with a 2.5% loss. Peers Aviva (LSE: AV) and Prudential (LSE: PRU) moved down 2%, while Old Mutual (LSE: OML) and Standard Life (LSE: SL) were down 1.4% and 1% respectively.
Admiral Group (LSE: ADM) declined marginally and RSA Insurance Group (LSE: RSA) remained flat.
Private equity group 3i (LSE: III) lost 1%.
Small Cap Movers
Other notable movers among the small caps included technology firm Seeing Machines (AIM: SEE), which rallied 23% after securing the first major deal for its Driver State Sensor technology.
Large and Mid Cap News
SSL International (LSE: SSL) has exercised an option to increase its stake in Beleggingsmaatschappij Lemore BV (BLBV), which is the holding company for its Commonwealth of Independent States (CIS) business, to 75% after its performance exceeded “all expectations".
Helical Bar seeing signs of recovery in London office marketLondon headquartered property developer Helical Bar (LSE: HLCL) said it is seeing signs that the London office market is recovering. In an interim management statement for the four months to 31 January 2010, the company completed 19 new lettings or lease renewals, increasing annualised income by £530,000, with deals worth a further £170,000 in the hands of solicitors.
Small Cap News
Transense Technologies PLC (AIM: TRT) said its subsidiary Translogik RFID Lrd has signed an exclusive global distribution agreement, excluding China, with Qingdao Mesnac Co Ltd for its range of RFID (Radio Frequency Identification) products, including its tyre RFID tag
Provexis PLC (AIM: PSX) said it has entered into a Letter of Intent for its Fruitflow technology with DSM Nutritional Products with a view to establish a long-term alliance giving DSM exclusive global rights to the water-soluble tomato concentrate.
Investment bank Fairfax issued a note on Discovery Metals ((ASX: DML; AIM: DME), calling investment in the Botswana operating copper miner a “rare opportunity,” giving it a net present value (NPV) of US$256 million or 44 pence per share, compared to the current value of around 33.5 pence.
Designer and manufacturer of intelligence gathering equipment DATONG (AIM: DTE) has secured a US$1.2 million contract to supply tracking and location technology to the US defence sector, which is the largest order for the group in the US for more than 18 months.
Mediterranean Oil & Gas (AIM: MOG) has appointed BNP Paribas SA (Euronext Paris: BNP) as a financial adviser to assist the company, primarily in assessing its debt financing options for the Ombrina Mare project. Earlier this week, the company doubled the 2P (proven and probable) reserves for Ombrina Mare, to 40 mmbbls (million barrels).
DDD Group (AIM: DDD) said growth in the second half of 2009 has been in line with that experienced in the first half, and is expecting to report full year revenues of £1.4 million compared to £592,000 for the previous year.
Independent oil and gas company Faroe Petroleum (AIM: FPM) says drilling has begun on the Fogelberg prospect, located in the Norwegian North Sea. Fogelberg on the PL433 license is a substantial oil prospect, located some ten kilometres to the north of the producing Asgard oil field. Fogelberg is the first of Faroe’s five high-impact wells planned for 2010.
Nostra Terra (AIM: NTOG) has made the final payment of US$275,000 for the Hoffman oil property in Kansas to take its interest to 25%, while increasing its acreage in the Trapp field near the property by an additional 160 acres.
Ithaca Energy (AIM, TSX-V: IAE) said that the Galaxy II heavy duty jack-up rig that has been contracted by the company to drill an appraisal well on the Stella field in the North Sea has been mobilized to the spud location and will start drilling this month.
Traffic monitoring technology specialist Sky High (AIM: SKHG) has appointed Peter Agnew as the company’s new commercial manager. According to chief executive Mark Mattison, Agnew’s experience in the market research industry will assist the growth of its Data Capture business unit.
Kalahari Minerals (AIM: KAH) announced that it has received 97.61% of the acceptances from Coronet Resources shareholders in favour of the conditional off-market takeover. Coronet’s principal asset is a 7.65% stake in Kalahari. The AIM listed company initially tabled the share-based bid in December, offering 1 Kalahari share for every 1.705 Coronet share held. Upon completion, Coronet’s holding could either be placed with new investors, or cancelled to boost the NAV (net asset value) per share.
Shares in Seeing Machines (AIM: SEE) soared this morning after the group announced its first major deal, concluding a Master Purchasing Agreement (MPA) with international miner Freeport McMoRan Copper and Gold Inc for its driver attention and fatigue monitoring system Driver State Sensor (DSS).
Xtract Energy (AIM: XTR) has entered into an agreement with its Turkish partners Merty Energy, acquiring a further 16% in their Extrem Energy joint venture for US$4.9 million. The company now has a 50% stake in the company. The JV partners also agreed to contribute a further US$2 million into Extrem to fund ongoing work on the Siraseki licence, near the Syrian border.

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