FTSE 100 rallies on positive UK and US data, commodities rise

Overview: the FTSE was buoyant today, rallying 1% on positive UK and US economic data.
Bank of England said today that banks are likely to boost corporate lending in Q2 in its credit conditions survey, while UK CIPS manufacturing reached its highest level in more than 15 years, rising to 57.2 in March. Today’s US data also turned out to be positive, showing a decline in initial jobless claims, which dropped by 6,000 last week.
Investors are now looking to US non-farm payrolls, which are due to be released tomorrow.
Oil and gas engineering firm Petrofac (LSE: PFC) emerged atop the leaderboard with a 6% advance. Base metal miners Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) followed with gains of 4.5%. Oil and gas producer Cairn Energy (LSE: CNE) and miners Antofagasta (LSE: ANTO) and Eurasian Natural Resources (LSE: ENRC) added more than 3.5%, while peers Vedanta Resources (LSE: VED) and Rio Tinto (LSE: RIO) tacked on 3%.
No FTSE 100 constituent lost more than 1%. Mobile operator Vodafone (LSE: VOD) lost nearly 1%, while pharmaceutical company GlaxoSmithKline (LSE: GSK) was down 0.5%.
US stocks opened higher today. The Dow Jones Industrial Average and the technology heavy NASDAQ composite climbed 0.75% in early trade, while the broader S&P 500 index rallied 0.8%.
Commodities
Crude’s ongoing rally was unaffected by this week’s inventories reports, which both showed build-ups in stockpiles to signal lower demand.
On Tuesday, inventories data from the American Petroleum Institute (API) showed that oil stockpiles added just 421,000 barrels last week, while distillates, which include diesel and heating oil, fell by 1 million barrels and gasoline stocks shed 946,000 barrels. The increase in stockpiles was smaller than expected, however, US Energy Information Administration (EIA) said on Wednesday that oil stockpiles increased by 2.9 million barrels, while gasoline inventories added 300,000 barrels and distillates dropped 1.1 million barrels.
May Brent Crude reached US$83.80/barrel, while US light, sweet crude advanced to US$84.80/barrel.
Blue chip oil and gas producers were on the rise today. BP (LSE: BP) gained less than 1% while fellow supermajor Shell (LSE: RDSB) was flat. BG Group (LSE: BG) added nearly 1%, while Tullow Oil (LSE: TLW) gained 1.4% and Cairn Energy (LSE: CNE) took the lead, advancing 3.2%.
Oil and gas engineering group Petrofac (LSE: PFC) rallied 5.5%, while peer Amec (LSE: AMEC) added 1.3%.
Midcaps followed the trend with the exception of Dragon Oil (LSE: DGO), which posted a small loss, and JKX Oil & Gas (LSE: JKX) and Salamander Energy (LSE: SMDR), which were flat.
Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) posted small gains, while Heritage Oil (LSE: HOIL) gained 1%. Dana Petroleum (LSE: DNX) and Premier Oil (LSE: PMO) climbed 2.7% and 1.2% respectively.
Services companies also did well as Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) tacked on 2.7% and 1% respectively.
Junior upstream oil and gas company Aminex (AIM: AEX) and energy investor Xtract Energy (AIM: XTR) went against the tide, slipping 14% and 7% respectively.
Gold touches $1,120 as US dollar slides
Gold remained steady above US$1,110/oz, reaching an intraday high of US$1,119/oz on Thursday as the US dollar continued to decline against other major currencies ahead of Friday’s key US employment data.
The American currency has been in decline against the euro this week after the EU agreed on a mechanism to provide Greece with financial aid together with the International Monetary Fund (IMF) if the debt-laden country is unable to raise the sufficient funds from the market. The deal, which was reached late last week, provided Europe’s single currency with immediate relief, though did little to improve the long-term outlook for Europe’s debt crisis, limiting gains in the euro.
The uncertainly over Greece's fiscal situation has been keeping the euro under pressure for weeks, while boosting the appeal of the safe-haven US dollar.
Gold is seen as a riskier alternative to the US dollar and usually moves inversely to the greenback.
In other news, bank Standard Chartered (LSE: STAN) cut its gold price forecast for 2011 from US$1,300/oz to US$1,100/oz.
The yellow metal got more support from today’s rally in Asian equity markets and subsequent gains in Europe.
Gold was steady at US$1,116/oz, while silver and platinum improved to US$17.69/oz and US$1,659/oz respectively.
Miners were buoyant today with all major stocks posting gains of over 1%. In the FTSE 100, gold miner Randgold Resources (LSE: RRS) rose 2.3%, while platinum producer Lonmin (LSE: LMI) added 2% and silver miner Fresnillo (LSE: FRES) tacked on 1.6%.
Specialty chemicals group Johnson Matthey (LSE: JMAT) added 1.6%.
Gold miner Petropavlovsk (LSE: POG) led the sector in the FTSE 250, advancing 4%. Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) followed with gains of 2.6% and 1.1% respectively.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) led the juniors, rallying 16%. South American based explorer Mariana Resources (AIM: MARL), Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Africa focused gold miner Pan African Resources (AIM: PAF) followed with gains of 7%, 6% and 4.5% respectively.
Turkey focused gold miner Ariana Resources (AIM: AAU) and junior diamond miner Stellar Diamonds (AIM: STEL) slipped 12.5% and 5% respectively.
Miners climb as base metals hold on to gains
Base metals didn’t show much movement as copper and zinc held steady at US$3.53/lb and US$1.06/lb, while nickel inched higher to US$11.31/lb.
Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) led the sector with gains of 4.6% and 4.3% respectively. Antofagasta (LSE: ANTO) and Eurasian Natural Resources (LSE: ENRC) tacked on more than 3%. Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) added 3%, while Anglo American (LSE: AAL) moved up 2.5%.
The world’s largest miner BHP Billiton (LSE: BLT) rose 2%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) added nearly 1%.
Laterite nickel specialist European Nickel (AIM: ENK), Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) and Indonesia operating coal miner Churchill Mining (AIM: CHL) joined the party, advancing 7.5%, 6% and 4% respectively.
Banks, insurance, private equity
Financial stocks were in buying mode today. Lloyds (LSE: LLOY) led the banking sector with a 2% gain, while fellow part-nationalised bank RBS (LSE: RBS) added 1.5%. Barclays (LSE: BARC) tacked on nearly 1%, while HSBC (LSE: HSBA) posted a small gain and Standard Chartered (LSE: STAN) was flat.
Prudential (LSE: PRU) was the top performer in the insurance sector with a 2.7% advance. Admiral Group (LSE: ADM) and Standard Life (LSE: SL) followed with gains of 1.5% and 1.1% respectively. Legal & General (LSE: LGEN), Old Mutual (LSE: OML) and RSA Insurance Group (LSE: RSA) posted small gains. Aviva (LSE: AV) was flat.
Private equity group 3i (LSE: III) gained less than 1%.
Large and Mid Cap News
Tullow Oil (TLW) announced that the Likonde-1 well, located onshore in the Lindi Block in the Ruvuma Basin of Southern Tanzania, has encountered thick sands with hydrocarbon shows.
Scottish and Southern Energy (LSE: SSE), through its wholly-owned Exploration and Production unit, has agreed to acquire natural gas assets and infrastructure from Hess Ltd for US$423 million in cash. Through the transaction SSE will acquire around 383bn cubic feet (bcf) or 64m barrels of oil equivalent (mmboe).
International oil & gas facilities service provider Petrofac (LSE: PFC) said it has acquired metering services and systems specialist Stephen Gillespie Consultants Ltd (SGC) for an initial cash consideration of 2.1 million, with up to 1.4 million in performance-based payments over two years.
Vedanta Resources (LSE: VED) has announced an increased in its share repurchase programme from US$500 million to US$825 million after buying back 21.1 million shares for US$430 million, aiming to enhance its shareholder value.
Small Cap News
Solo Oil’s (AIM: SOLO) exploration partner in Tanzania, Tullow Oil (LSE: TLW), has drilled the Likonde-1 wildcat well to a total depth of 3,647m and the well encountered thick sands with hydrocarbon shows. Likonde-1 intersected two sandstone intervals of over 250m combined thickness with evidence of residual oil and gas.
Ryanair (LSE: RYA) said it believes it will report better-than-expected profits, for the year ended 31st March 2010. The airline raised its net profit guidance to not less than €310m, up €35m compared with previously guidance of €275m.
Ascent Resources (AIM: AST) announces that drilling is currently underway on the PEN-106 well in the Penészlek area of the Nyírség exploration permits in eastern Hungary. Last month, the company began production from the nearby PEN-105 well, and once the PEN-106 drilling is completed the rig will return to PEN-101 to complete remedial work required to ready it for production.
Ariana Resources (AIM: AAU) has raised £1 million through a placing of 50 million new shares at 2p each to certain institutional investors. The proceeds will be used to progress the company’s ongoing gold and silver exploration and development work in Turkey.
Leyshon Resources (ASX/AIM: LRL) director Richard Seville acquired 750,000 ordinary fully paid shares in market purchases between March 29 and 31 at an average price of A$0.194 cents per share for a total of A$145,584.00.
Fusion IP’s (AIM: FIP) portfolio company Asalus Medical Instruments Ltd, launched earlier this year, has successfully raised £0.45m through its first funding round.  Notably, the fundraising also represents the first investment by the IP Group (AIM: IPO) in one of Fusions’ portfolio companies under the agreement between the companies, signed in November 2009.
Pharmaceutical company Lipoxen (AIM: LPX) said in its full-year results statement that it expects its project base to return significant license fee income going forward. It noted that the license deals that have been pushed out from 2009 to 2010, leading to declines in revenues last year, still have the potential to deliver revenues in the near term.
ReNeuron Group (AIM: RENE) said that it has been notified that a major shareholder, David Royds has upped his stake in the company with an increase of 7.9 million shares. Royds now holds 24.15m shares, which represents 5.517% of ReNeuron’s issued share capital.
Bellzone Mining (AIM: BZM) has commenced trading on the AIM market of the London Stock Exchange today, after placing 96 million new shares to raise £33.6 million for its project portfolio of assets in Guinea in West Africa that comprises more than 13 Bt (billion tonnes) of magnetite and 2.9 Bt of oxide ore.
Anglesey Mining (AIM: AYM) announced that the underwriters of the recent Labrador Iron Mines’ (TSX: LIM) CDN$35m fundraising have exercised their over-allotment option. Consequently, Anglesey has sold 810,900 of its LIM shares at C$5.55 per share, raising gross proceeds of C$4.5m (£2.9m). Following the exercise Anglesey Mining now holds approximately 17.7 million Labrador Iron Mine shares, or 41% of the company.
Ceramic Fuel Cells (AIM, ASX: CFU) has sold its first BlueGen gas-to-electricity unit in the United Kingdom, to Ideal Boilers. According to the company, the BlueGen units - which convert mains gas into electricity - boasts greater efficiency compared to the current European power grid.

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