FTSE 100 recovers as miners and financials advance, US futures flat ahead of sales and jobless data

Overview: following pre-trade projections of a 0.8% rise, the FTSE 100 stabilized 0.5% above the opening level by mid afternoon to reclaim yesterday’s losses on a strong performance from mining and insurance stocks.
Bailed out bank Lloyds (LSE: LLOY) was in the lead with a 3% gain. Insurers Legal & General (LSE: LGEN) and Old Mutual (LSE: OML) also did well, adding more than 2%. Xstrata (LSE: XTA) led the mining stocks, rising 2.7%, while sector peers Antofagasta (LSE: ANTO) and ENRC (LSE: ENRC) were up 2%. Other notable risers included plumbing and heating equipment manufacturer Wolseley (LSE: WOS) with a 2.5% gain and pharmaceutical company AstraZeneca (LSE: AZN), which rose 2%.
Home Retail Group (LSE: HOME) slid to the bottom of the index with a 5% loss despite lifting its full year profit forecasts, while saying that trading conditions would remain challenging in the year ahead. Retailers Kingfisher (LSE: KGF) and Marks and Spencer (LSE: MKS) and specialist distribution group Bunzl (LSE: BNZL) also were in decline, shedding more than 2%. Other notable fallers included fashion house Burberry (LSE: BRBY), commercial property company British Land (LSE: BLND) with losses of over 1.5% and clothing retailer Next (LSE: NXT), which retreated 1%.
Wall Street is poised for a flat start today as futures for the Dow Jones Industrial Average, the broader S&P 500 index and the technology heavy NASDAQ composite were unmoved in the morning. Investors will be looking to the flurry of data that is set to be released in the US later today, including retail sales and jobless claims updates.
Commodities
Oil prices quickly rebounded from recent falls, climbing returning above US$80 today after absorbing a hit from yesterday’s update from the US Department of Energy (DoE), which reported an increase of 3.7 million barrels in US oil stockpiles in the week to 8 January. Distillate reserves also unexpectedly increased during the week, adding 1.4 million barrels, offering signs of a weakening oil demand in the US. However, crude futures later gave way, erasing most of their gains.
March Brent Crude slid to US$78.75/barrel, while US light, sweet crude retreated to US$79.75/barrel.
Major oil and gas stocks didn’t show much movement in the morning. Tullow Oil (LSE: TLW) was in the lead with a 1.3% climb. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) declined marginally, while BG Group (LSE: BG) shed 1.2% and another FTSE 100 constituent Cairn Energy (LSE: CNE) was flat.
Petrofac (LSE: PFC) also made little headway, while fellow services company Amec (LSE: AMEC) posted an insignificant loss.
Midcaps were mixed. Heritage Oil (LSE: HOIL) and Soco International (LSE: SIA) were the top performers, advancing 1.3% and 1% respectively, while Dana Petroleum (LSE: DNX) added less than 1%.
JKX Oil & Gas (LSE: JKX), Premier Oil (LSE: PMO) and Salamander Energy (LSE: SMDR) declined marginally, while Dragon Oil (LSE: DGO) was down 1% and Melrose Resources (LSE: MRS) slid to the bottom of the pile with a 3.5% loss.
Services also were mixed as Wood Group (LSE: WG) added nearly 1%, while Wellstream Holdings (LSE: WSM) declined marginally.
Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) led the juniors, climbing 8% after upping its oil and place estimate for its Shaikan structure in the Kurdistan region of northern Iraq.
Mongolia-focused Petro Matad Ltd (AIM: MATD) headed in the opposite direction, sliding 5%.
Miners mixed as gold and silver retreat
Gold fell on a stronger US Dollar today after the American currency rose ahead of European Central Bank’s decision on interest rates that is due today was the main reason behind the yellow metal’s fall. Gold declined to US$1,136/oz on Thursday, while silver retreated to US$18.53/oz. However, platinum firmed, reaching US$1,587/oz.
Investors will be looking to the flurry of data that is set to be released in the US later today, including retail sales and jobless claims updates.
Mining stocks were mixed. In the FTSE 100, silver and gold miner Fresnillo (LSE: FRES) posted a small gain after updating the market on its Q4 production. Gold miner Randgold Resources (LSE: RRS) was flat, while another FTSE 100 constituent platinum miner Lonmin (LSE: LMI) declined marginally.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Aquarius Platinum (LSE: AQP) was the top performer among the midcaps with a 2% gain. Gold miner Petropavlovsk (LSE: POG) declined marginally and silver producer Hochschild Mining (LSE: HOC) was unmoved.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) led the small caps, climbing 13%. Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) followed with an 11% rally, while Commodity asset development company Mercator Gold (AIM: MCR) added 9%.
Copper and gold miner EMED Mining (AIM: EMED) also did well, takcing on 5% after updating the market on its Rio Tinto project in Andalucía. Iran focused gold explorer Persian Gold (AIM: PNG) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) both added 5%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) slipped 17% on no news today. Tajikistan operating gold miner Kryso Resources (AIM: KYS) slid 7.5%, Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) declined 6% and South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) was down 5.5%.
Base metals mixed
Base metals were mixed today with copper slipping to US$3.38/lb, while nickel was flat at US$8.22/lb and zinc held steady at US$1.13/lb.
Base metal miners were in buying mode today with Xstrata (LSE: XTA) leading the way with a 2.5% advance. Antofagasta (LSE: ANTO), Eurasian Natural Resources (LSE: ENRC) and Kazakhmys (LSE: KAZ) followed with gains of over 2%, while BHP Billiton (LSE: BLT) and Rio Tinto (LSE: RIO) climbed 1.5%. Vedanta Resources (LSE: VED) tacked on 1% and Anglo American (LSE: AAL) was flat.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, adding 1%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and specialty minerals exploration and development company Thor Mining (AIM: THR) led the small caps, rising 12.5% and 11% respectively. Zinc miner Connemara Mining (AIM: CON) added 9.5%, while iron ore focused investor Red Rock Resources (AIM: RRR) was up 7.5% after updating the market on its Migori project in Kenya and Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) improved 4%.
Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA), laterite nickel specialist European Nickel (AIM: ENK) and South American focused junior miner Herencia Resources (AIM: HER) were in decline, shedding 8%, 6.5% and 4% respectively.
Banks, insurance, private equity
Lloyds (LSE: LLOY) led the banking sector with a 3% climb, while fellow bailed out bank Royal Bank of Scotland (LSE: RBS) added 1%. Standard Chartered (LSE: STAN) also gained 1%, while Barclays (LSE: BARC) advanced 1.6% and HSBC (LSE: HSBA) remained flat.
Insurers mostly rose. Legal & General (LSE: LGEN) and Old Mutual (LSE: OML) were the top performers with 2% gains, while Aviva (LSE: AV) came close, tacking on 1.8%. Admiral Group (LSE: ADM) and RSA Insurance Group (LSE: RSA) rose marginally, while Standard Life (LSE: SL) was flat and Prudential (LSE: PRU) posted a small gain.
Private equity group 3i (LSE: III) climbed 1.4%.
Small Cap Movers
Other notable movers among the small caps included Lipoxen (AIM: LPX), which added nearly 10% after announcing a US patent for its bio-polymer technology and alternative energy company SeaEnergy (AIM: SEA) with a 6% climb.
Large and Mid Cap News
Barclays (LSE: BARC) has agreed the acquisition of LaBranche & Co’s Designated Market Maker (DMM) assignments on the New York Stock Exchange (NYSE) for US$25 million. The deal further enhances the group’s ongoing growth in its New York based market making business, and the transaction is expected to be completed in the current quarter.
Major international mining group Rio Tinto (LSE, ASX: RIO) reported a 49% year-on-year increase in iron ore production during the fourth quarter of 2009. The FTSE100 constituent said it has seen a recovery across most of its commodities but it remains cautious with government-backed economic stimulus programmes due to wind down across the world.
International oil & gas facilities service group Petrofac (LSE: PFC) has acquired privately held Scotvalve Services Ltd for an initial payment of £3 million, with up to a £2 million in further performance related payments due over the next three years. The newly acquired mechanical service group will allow Petrofac to provide repair and maintenance services across a wider geographic area.
European operating electrical retailer DSG International (LSE: DSGI) said it had a good Christmas with all regions and product categories performing well during the peak shopping season. In a trading statement for the 12 weeks ended 9th January 2010, the company revealed an 11% increase in total group sales and an 8% increase on a like-for-like basis.
Public Private Partnership (PPP) construction specialists, Carillion (LSE: CLLN) has reached financial close on its Rochdale Building Schools for the Future programme. The building and refurbishment work on the £192 million project will begin this month. The contract is part of the UK government's wider 55 billion programme.
Small Cap News
Broker Mirabaud noted this week’s update from Regal Petroleum (AIM: RPT), announcing the long-awaited results from the SV-58 well at the Svyrydivske gas and condensate field in Ukraine, which flowed at 395 boepd (barrels of oil equivalent per day) with the aid of new customized jet perforation technique.
Medusa Mining Ltd (AIM, ASX: MML; TSX: MLL) said chairman Kevin Tomlinson has informed the board that he will be resigning to attend to increased work commitments.
Westminster Group PLC (AIM: WSG) said the Close Protection (CP) and Risk Assessment division it acquired in February 2009, Longmoor Security, announced it has received unprecedented interest for its CP training courses in 2010.
Northern Petroleum (AIM: NOP) has commenced 3D seismic operations on four licenses in the West Sicily thrust belt to obtain better quality and more complete definitions of structures identified by two previous 2D seismic campaigns, which the company said were “encouraging.”
Kyrgyzstan operating mineral explorer Chaarat Gold (AIM: CGH) said its ongoing drilling on the Main Zone project has intersected further significant gold mineralisation. The results of the latest seven drill holes are "encouraging", and the group is pursuing its plan to establish the low cost bulk mining operation with increased confidence. A revised resource statement for the project is expected later this quarter.
Avesco Group (AIM: AVS) swung to losses in 2009, going from a profit of £6.5 million to a pre-tax loss of £13.2 million for the full year ending 30 September 2009, which the company said was a period of “acute economic downturn,” impacting its corporate presentation, entertainment and broadcast markets.
As expected, Orosur Mining (TSX-V, LSE: OMI), the South American focused gold producer, announced lower second quarter production compared to the corresponding period in the previous year, but higher than Q1 2010.
Production for Q2 (ended November 30) totalled 13,580 ounces (362,366 tonnes @ 1.25 g/t), up from 13,173 ounces in Q1 2010, but below Q2 2009 when the company produced 15,837 ounces.   Production was hit by a combination of exceptionally high levels of rainfall and lower grades at the mill. Cash costs for Q2 2010 were US$871 per ounce compared to a realized gold price of US$1065 per ounce.
Lipoxen PLC (AIM: LPX) said it has been granted a US patent for its PolyXen bio-polymer technology. The patent identifies that the PolyXen platform is more effective in improving the therapeutic function of protein drugs.

EMED Mining (AIM: EMED) today updated the market on the progress with restarting its Rio Tinto copper mine in Spain (Proyecto Rio Tinto, PRT), saying that the local government announced the location of the industrial park in the district near PRT, which will entail a €20 million investment from the Junta de Andalucía in the over a 35 hectares site selected for its proximity to transport infrastructure.
Red Rock Resources (AIM: RRR) said that five diamond drill holes at the Macalder and Nyanza prospects at the Migori gold project in Kenya, drilled but never sampled by the previous operators, have been logged and samples over 498 metres have been prepared and sent for testing.
Central China Goldfields PLC (AIM: GGG) said its chairman Peter Ruxton bought a further 200,000 shares in the company today at 2.88 pence per share to take his stake in the company to 0.39% from 0.28%.
PureCircle (AIM: PURE) has signed a long term contract for expansion of Stevia production with Paraguayan farmers’ Cooperativa Colonias Unidas (CCU) for the production and supply of Stevia leaf, which comes from the Stevia Rebaudiana plant, native to subtropical and tropical South America and Central America.
Gulf Keystone Petroleum (AIM: GKP) has upped the range of oil in place for the Shaikan structure in Iraq’s Kurdistan region to a gross 1.9 to 7.4 BBO (billion barrels of oil) with a mean of 4.2 BBO in place after data from the Cretaceous, Jurassic and Triassic formations of the Shaikan-1 well tested to a depth of 2,950 metres was independently evaluated by Dynamic Global Advisors.  http://www.proactiveinvestors.co.uk/companies/news/12188/ftse-100-recovers-as-miners-and-financials-advance-us-futures-flat-ahead-of-sales-and-jobless-data-12188.html