FTSE 100 falls as miners, oil and gas and financials weigh, US stocks open lower

Overview: the FTSE 100 was 0.9% lower in late afternoon, still feeling the impact from yesterday’s Q4 UK GDP reading, which revealed a 0.2% growth against the expected 0.4% improvement.
The markets were further hit by another round of losses in the mining sector as metal prices continued to show weakness, while oil and gas and financial stocks also were in retreat.
The blue chip banks were among the heaviest fallers in the index today after the International Monetary Fund (IMF) said that banks would need to raise billions to avoid a second crisis.
Hedge fund managed Man Group (LSE: EMG) slid to the bottom of the index with a loss of nearly 6%, while Tullow Oil (LSE: TLW) and part-nationalised bank RBS (LSE: RBS) followed with declines of about 5%. Other notable fallers included heating and plumbing equipment manufacturer Wolseley (LSE: WOS) and catered Compass Group (LSE: CPG) with losses of 3% and banks Barclays (LSE: BARC) and HSBC (LSE: HSBA), which were down 2.5% and 2% respectively.
Insurance focused investor Resolution (LSE: RSL) led the blue chips with a 2% gain. Beverage Group SABMiller (LSE: SAB) and platinum miner Lonmin (LSE: LMI) followed, advancing 1.5%. Defence contractor Cobham (LSE: COB) and British American Tobacco (LSE: BATS) were the only other FTSE 100 constituents to add more than 1%. Software developer Sage Group (LSE: SGE) and power generation company International Power (LSE: IPR) gained nearly 1%.
The US stock market was off to a negative start today with the main indexes declining in early trade. The Dow Jones Industrial Average and NASDAQ composite were down 0.4%, while the broader S&P 500 index fell 0.5%.
Commodities

Crude futures were trading within a narrow range today ahead of this week’s inventories update from the US Department of Energy (DoE), which is scheduled to come out today. Tuesday’s data from the American Petroleum Institute (API), which showed a surprising decline of 2.2 million barrels in crude stocks against the expected increase of 1-1.5 million barrels, had little impact on price movements.
March Brent Crude inched higher to US$73.48/barrel, while US light, sweet crude stopped just short of US$75/barrel.
Oil and gas producers were in decline today. Tullow Oil (LSE: TLW) slid to the bottom with a loss of over 4% after announcing a share placing to raise nearly £1 billion to fund the development of its assets in Uganda.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) declined 1%, as did BG Group (LSE: BG) and Cairn Energy (LSE: CNE).
Services companies did better as Amec (LSE: AMEC) gained 1%, while oil and gas engineering firm Petrofac (LSE: PFC) was unmoved.
Midcaps followed the trend as most FTSE 250 energy producers were sitting in the red by mid afternoon. Dragon Oil (LSE: DGO) lost nearly 4%, while Salamander Energy (LSE: SMDR) was down 2.5% and Dana Petroleum (LSE: DNX) slid 1.5%. JKX Oil & Gas (LSE: JKX) retreated 1%, Soco International (LSE: SIA) declined marginally and Heritage Oil (LSE: HOIL) was flat, as were services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM).
Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) led the small caps with a 10% climb after pricing its proposed placing at 32 pence. Energy investor Xtract Energy PLC (AIM: XTR) followed, advancing 8% on no news.
Africa focused energy company Dominion Petroleum (AIM: DPL) headed in the opposite direction, shedding 4%, while Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) were down 3.5% and 3%.
Gold, silver and platinum drop on stronger US Dollar
Gold retreated today after getting within $3 of the US$1,100/oz mark to settle at US$1,091/oz as the US Dollar firmed ahead of today’s decision on interest rates in the US. Investors will also be waiting for the US Senate’s confirmation vote on Ben Bernanke’s second term as Chairman of the Federal Reserve, which is set for Thursday and will have an impact on the movements in the currency markets.
The greenback rose yesterday following news from China, whose central bank has reportedly told a few large banks to raise their reserves following a series of measures to curb economic activity and prevent one of the world’s fastest growing economies from overheating that were announced earlier this month. The yellow metal, which is seen as an investment alternative to the dollar, was pushed down to US$1,190/oz by the news.
Other precious metals followed as silver and platinum slid to US$16.57/oz and US$1,513/oz respectively.
Mining stocks mostly declined today. Blue chips were mixed as while silver and gold miner Fresnillo (LSE: FRES) lost almost 4%, while gold miner Randgold Resources (LSE: RRS) was flat and platinum producer Lonmin (LSE: LMI) gained 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) also remained unmoved.
Midcaps were in the red with gold miner Petropavlovsk (LSE: POG) sliding 2.4%, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) lost 1%.
Most juniors followed the trend and declined. London listed Australian gold producer Leyshon Resources (AIM: LRL) and Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) both lost about 6.5%, Philippines focused gold producer Medusa Mining (AIM&ASX: MML), commodity asset development company Mercator Gold (AIM: MCR) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) all lost nearly 5%.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) were down 3.5%.
Copper and nickel decline to weaken miners
Base metals also fell with copper and nickel moving down to US$3.28/lb and US$8.09/lb, while zinc declined to US$1.01/lb.
Base metal focused stocks were in decline. Anglo American (LSE: AAL) and Xstrata (LSE: XTA) were at the bottom of the sector with losses of 2.5%. Eurasian Natural Resources (LSE: ENRC) followed with a 1.5% gain, while Antofagasta (LSE: ANTO), Kazakhmys (LSE: KAZ) and Rio Tinto (LSE: RIO) all shed 1%.
The world’s largest miner BHP Billiton (LSE: BLT) and Vedanta Resources (LSE: VED) declined marginally.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, sliding 1.7%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) moved along with a 6% loss. Mineral sands producer Kenmare Resources (LSE: KMR) followed, sliding 4%, while Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and zinc mining and recycling specialist ZincOX (AIM: ZOX) lost 3.5%.
Banks, insurance, private equity
Most financial stocks were in decline today. Royal Bank of Scotland (LSE: RBS) was the heaviest fallers with a 5% drop, while Barclays (LSE: BARC) was down 3%, HSBC (LSE: HSBA) lost 2% and Standard Chartered (LSE: STAN) was down 1.4%. Lloyds (LSE: LLOY) shed 1%.
Insurance stocks also weakened. Legal & General (LSE: LGEN) led the retreat with a loss of nearly 3%, Aviva (LSE: AV) shed almost 2%, Prudential (LSE: PRU) and Standard Life (LSE: SL) moved down about 1.5% and Admiral Group (LSE: ADM) slid 1.2%. RSA Insurance Group (LSE: RSA) posted an insignificant loss.
Private equity group 3i (LSE: III) was down 1%.
Small Cap Movers
Other notable movers among the small caps included Africa focused investor Lonrho (AIM: LONR), which tacked on 8%.
Large and Mid Cap News
Australian-based resources company Blackthorn Resources (ASX: BTR) has received welcome news, with joint venture partner BHP Billiton (LSE: BLT, ASX: BHP) electing to fund the next stage of exploration at the Mumbwa Iron Oxide Copper Gold project in Zambia.
International Power (LSE: IPR) has successfully completed the financing for Thai National Power 2 (TNP2), a new 110 MegaWatt gas-fired cogeneration project in Thailand. The company also sealed a power purchase agreement and an engineering procurement and construction (EPC) agreement for TNP2. The FTSE100 constituent has also restructured the A$742 million debt of its Hazelwood power station and mine in Australia.
Mariana Resources (AIM: MARL) has been advised by the operator of the Los Amigos joint venture, Hochschild Mining (LSE: HOC), that three RC (reverse circulation) holes have been drilled for a total 900 metres at the project in the Santa Cruz province of Argentina and all three intersected wide alteration zones containing intervals between 1 and 10 metres wide with quartz veinlets.
Punch Taverns (LSE: PUB) has agreed to sell eight managed pubs to Greene King PLC (LSE: GNK) for £15.9 million in cash. The pubs are freehold outlets located around Great Britain including one in central London and one in Scotland.
British pub group Greene King (LSE: GNK) is confident it will meet expectations for the financial year. The company said it had a relatively strong trading performance over the last nine weeks, despite the impact of recent poor weather. This morning, in an interim management statement for the 38 weeks to 24 January 2010, the FTSE250 constituent reported 4.3% like-for-like retail sales growth.
Vedanta Resources (LSE: VED) hit a record quarterly production volumes for mined zinc and lead, aluminium and iron ore during the 12 weeks ended 31 December 2009. The FTSE100 constituent also achieved a company record for commercial power sales in the third quarter. For the whole nine month period, Vedanta said it had strong earnings, resulting from higher volumes, efficient cost management and recovering commodity prices.
Tullow Oil PLC (LSE: TLW) has successful raised £925 million through a placing of approximately 80.4 million new shares at a price of 1,150p each. The proceeds will be used to exercise its pre-emption rights over its Ugandan joint venture with Heritage Oil (LSE: HOIL).
Small Cap News
Thor Mining (AIM, ASX: THR) plans to raise A$250,000 through a placing of 16,666,667 new ordinary shares. The funds will be used to evaluate new projects to supplement the Molyhil tungsten and molybdenum project in Australia.

Allocate Software (AIM: ALL), has been selected by the London Procurement Programme (LPP) for its new Workforce Optimisation Framework. The HR software specialist scored the highest amongst the evaluation candidates. The selection demonstrates the company’s position as the leading supplier of e-Rostering and workforce optimisation solutions to the NHS, Allocate said
Gold exploration company Scotgold Resources (ASX: SGZ), advises that it has decided to seek admission for its ordinary shares to trade on the London Stock Exchange’s AIM Market.
Shares in West African Diamonds (AIM: WAD) were restored to trading this morning after the company posted an AIM Admission Document in relation to the proposed acquisition of Stellar Diamonds Ltd to shareholders.
Range Resources Ltd (ASX: RRS; AIM: RRL) has announced that preparations are underway to move in production equipment to the Smith oil and gas well site in Texas, which has been prepared for the recommencement of production following recent heavy rainfalls.
Pan African Resources (AIM: PAF) today updated the market on its first half results, expecting a 45% to 50% increase in earnings per share from 0.23 pence a year earlier, while headline earnings per share are set to be 1 to 6% higher than 0.36 pence in the half to 31 December 2008.
NEOVIA Financial (AIM: NEO) announced the launch of its NETELLER e-wallet payment services to BSkyB’s (LSE: BSY) Sky Betting and Gaming customers on their portfolio of e-gaming sites this February including Sky Bet, Sky Poker, Sky Vegas and Sky Bingo, enabling a weekly audience of 150,000 active visitors to pay in and withdraw money using an e-wallet as an alternative to credit cards.
AFC Energy (AIM: AFC) has secured an order from Centrica (LSE: CNA), reserving 250 KiloWatts of fuel cell systems for use in a flagship project. The commercial terms of the agreement will be agreed following the completion of AFC’s development of its 50kW fuel cell system in 2011.
Globo (AIM: GBO) has entered into a contract to provide its mobile CitronGO! software suite to one of the largest mobile network operators in South East Asia, which has approximately 85 million subscribers.

Technology commercialisation and investment company Imperial Innovations Group (AIM: IVO) has entered into a licence agreement with Swiss pharmaceutical group Novartis AG. Through the deal the drug-maker has acquired the exclusive worldwide licence to the intellectual property for a novel vaccine candidate against Meningitis B.
Kiotech International PLC (AIM: KIO) said it was notified that group finance director Karen Prior today bought 150,000 shares in the company at 3.5 pence each.
Aurelian Oil & Gas (AIM: AUL) said it has received strong investor support for its proposed placing, and as a result is going to raise an additional €7 million, taking the gross proceeds to approximately €39 million. The placing price will be 32 pence per share and it expects the new shares to be admitted to AIM on or around 4 February 2010.
Central China Goldfields (AIM: GGG) will commence field work at the 7,981 hectare Cikoleang gold project in Indonesia. The initial programme aims to extend the existing area of mineralisation ahead of more detailed analysis which is likely to include drilling later in the year. 

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