Overview: the FTSE 100 was in bullish mode for the better part of the day, tacking on nearly 1% to test 5,700 in the afternoon, though the blue chip index trimmed gains to just 0.4% later in the day after an existing home sales update that came out in the US showed a 0.6% drop in February, marking the third straight month of declines.
Meanwhile, UK inflation rate fell from 3.5% to 3% in February.
Oil and gas producer Cairn Energy (LSE: CNE) emerged atop the leaderboard, rallying 8% after releasing its full year results. Insurer Legal & General (LSE: LGEN) followed with a 5% gain. Other notable risers included tour company TUI Travel (LE: TT), which climbed 3.7%, airline British Airways (LSE: BAY) and caterer Compass Group (LSE: CPG), which added 3% and 2.5% respectively.
Retailer Kingfisher (LSE: KGF) was at the bottom of the pile, sliding 3%. Defence and aerospace systems manufacturer BAE Systems (LSE: BA) and Home Retail Group (LSE: HOME) followed, shedding 2.7% and 2.2% respectively. Interdealer broker ICAP (LSE: IAP), United Utilities (LSE: UU) and food manufacturer Unilever (LSE: ULVT) lost about 1.5%.
US stocks were higher after fluctuating in early trade. The Dow Jones Industrial Average climbed 0.35%, while the broader S&P 500 index rose 0.15%, as did the technology heavy NASDAQ composite.
Commodities
Crude prices were supported by today’s rally in Asian and European markets. Most Asian stocks gained, while the UK’s FTSE 100 added nearly 1% in mid afternoon trade.
Inventories data from the American Petroleum Institute (API) is due today, while a more closely watched report from US Energy Information Administration (EIA) will be out tomorrow.
May Brent Crude advanced to US$80.49/barrel, while US light, sweet crude improved to US$82/barrel.
Blue chip oil and gas producers didn’t show much movement today with the exception of Cairn Energy (LSE: CNE), which rallied 9.2% after releasing its full year results along with a positive operational update.
Tullow Oil (LSE: TLW) gained nearly 1%, as did BP (LSE: BP). Another supermajor Shell (LSE: RDSB) was flat, as was BG Group (LSE: BG).
Petrofac (LSE: PFC) did well, advancing 3%, while fellow oil and gas engineering firm Amec (LSE: AMEC) posted a small gain.
Melrose Resources (LSE: MRS) led the midcaps, climbing 2.5%. Dana Petroleum (LSE: DNX) followed with a 2.1% gain. Dragon Oil (LSE: DGO), Heritage Oil (LSE: HOIL), JKX Oil & Gas (LSE: JKX), Premier Oil (LSE: PMO), Salamander Energy (LSE: SMDR) and Soco International (LSE: SIA) rose marginally.
Services companies did well with Wellstream Holdings (LSE: WSM) and Wood Group (LSE: WG) adding 3% and 1.6% respectively.
Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), which announced a license award today, and Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), which reported its half yearly results, led the juniors with gains of 5% and 4% respectively. Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) added 3.5%.
Europe focused oil and gas developer Ascent Resources (AIM: AST) and Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) headed in the opposite direction, slipping 8.7% and 5.5% respectively.
Gold slips below $1,100 on stronger US dollar
Gold slipped below US$1,100/oz, settling at US$1,097/oz today after the US dollar extended gains against the euro amid uncertainly over Greece’s fiscal crisis as Germany is still at odds with European Union commissioners and other euro zone countries over the possible aid package for the debt laden country.
German Chancellor has reiterated her stance that Greece does not require an EU bailout, referring to comments by Greek Prime Minister George Papandreou, who has said that Greece was not looking for financial aid, but rather for regulatory changes to prevent its ongoing debt crisis from exacerbating and spreading beyond the euro zone.
Leaders of other EU states including France and Italy supported the European Commission’s President Jose Manuel Barroso, who has called on EU countries to put together an aid package for Greece ahead of this week's EU summit.
Public opinion polls in Germany have shown strong opposition to the country’s participation in a bailout for Greece.
Greece’s debt problems that have been pushing down the euro and other factors including India’s unexpected interest rate hike and China’s rising inflation rate have been weighing on gold, keeping the yellow metal around the US$1,100/oz mark.
Other precious metals also retreated. Silver slid to US$16.82/oz, while platinum dropped to US$1,593/oz.
All major miners were on the rise today. Platinum producer Lonmin (LSE: LMI) was in the lead with a 2.3% gain. Gold producer Randgold Resources (LSE: RRS) followed with a 1.2% advance, while silver miner Fresnillo (LSE: FRES) posted a marginal gain.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) also added less than 1%.
Silver producer Hochschild Mining (LSE: HOC) was the top performer among the midcaps, advancing 3.5%. Aquarius Platinum (LSE: AQP) tacked on 1.9%, while gold miner Petropavlovsk (LSE: POG) rose 1.3%.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) was one of the leading performers among the small caps, rising 6%. Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Turkey focused gold miner Ariana Resources (AIM: AAU) climbed 4.5% and 4% respectively.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) slipped 5%, while South American based explorer Mariana Resources (AIM: MARL) and Philippines focused Metals Exploration (AIM: MTL) lost 3.5%.
Miners advance as copper and nickel rise
Base metals advanced as copper and nickel added US$3.38/lb and US$10.16/lb, while zinc climbed to US$1.02/lb.
Mining stocks advanced. Eurasian Natural Resources (LSE: ENRC) was in the lead with a gain of nearly 3%. Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) followed, adding slightly more than 2%. BHP Billiton (LSE: BLT) and Kazakhmys (LSE: KAZ) tacked on 1.5%, while Xstrata (LSE: XTA) rose 1.1%.
Anglo American (LSE: AAL) and Antofagasta (LSE: ANTO) added nearly 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) continued its rally, rallying 7.3% after announcing its preliminary full year results.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and Russia focused copper and nickel miner Amur Minerals (AIM: AMC) did well, tacking on 6% and 5% respectively. Botswana operating nickel and copper miner Discovery Metals (AIM: DME) and copper and nickel explorer Regency Mines (AIM: RGM) added more than 3%.
Forte Energy (AIM: FTE) slipped 7%.
Banks, insurance, private equity
Standard Chartered (LSE: STAN) led the banking sector, advancing 1.8%. Lloyds (LSE: LLOY) moved up 1.7%, while Barclays (LSE: BARC) tacked on 1%, Royal Bank of Scotland (LSE: RBS) posted a marginal gain and HSBC (LSE: HSBA) was flat.
Legal & General (LSE: LGEN) led the insurers, adding nearly 5% after announcing its full year results. Admiral Group (LSE: ADM) was up 3%, while RSA Insurance Group (LSE: RSA) added less than 1%. Aviva (LSE: AV) was flat, while Prudential (LSE: PRU) and Standard Life (LSE: SL) posted small losses. Old Mutual (LSE: OML) was down 1.2%.
Private equity group 3i (LSE: III) was flat.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP) with a 7% gain and SeaEnergy (AIM: SEA), which rallied 9%.
Large and Mid Cap News
Full year results from mid-tier iron ore producer Ferrexpo (LSE:FXPO) helped lift the company’s share price 4.7% this morning – the third best performance in the FTSE 250. Shares in the Ukraine focused company have delivered a solid performance in 2010, rising more than 50% as investors begin to price in a recovery in demand for iron ore and speculation of significantly higher contract prices this year.
Small Cap News
Kazakhstan is well known for its excellent success rate for oil and gas explorers, but Jupiter Energy (ASX:JPR) has undoubtedly helped boost the profile of Kazakhstan this morning amongst the Australian investment community.
Communications consultant and project management specialist Norcon (AIM: NCON) delivered a strong set of results for the year ended 31 December 2009. The company reported 16% revenue growth to US$78.2m (FY08: US$67.7m), net profit increased by 20% to US$7.7m (FY08: US$6.4m) and pro-forma earnings per share increased by 20% to US$0.18 (FY08: US$0.15).
South American focused gold explorer and developer Patagonia Gold (AIM: PGD) reported more exceptionally high grade results from ongoing drilling at the Cap-Oeste gold-silver project in Argentina’s Santa Cruz province. Santa Cruz has become a hot bed of exploration activity in recent years thanks to several discoveries in the province and a supportive mining code.
Orders for Synchronica (AIM: SYNC) are coming in hard and fast: today the group announced a reseller agreement for its Mobile Gateway email product, covering 25,000 licenses, with an Indian device manufacturer. Under the terms of the deal, the new Indian partner will bundle Synchronica's Mobile Gateway with devices under its established brand, to be sold in turn to mobile operators across India.
Platinum Australia (ASX: PLA) (AIM: PLAA) has released the latest results from the resource definition drilling program on the Rooderand Platinum Project located on the western Limb of the Bushveld Igneous Complex (BIC) in South Africa.
Asterand (AIM: ATD) said its subsidiary BioSeek and research and development focused specialty pharmaceutical company Ono Pharmaceutical Co Ltd of Japan have signed a multi-year drug discovery collaboration agreement, under which BioSeek will receive research funding and milestone payments upon achievement of a certain milestone by a drug candidate discovered under this collaboration.
In its interim report, Nighthawk Energy (AIM: HAWK) said it continues to be encouraged by its performance, as it begins to see progress with its production. In the six months ended 31 December 2009, the company generated revenues of US$1.01m, up 218% against the comparative period in 2008.
Ovoca Gold (AIM: OVG, FSE: OVX) has completed the resampling and testing of previously drilled core material on the Oleninskoye deposit on the Kola peninsula in Russia which was drilled to a depth of 285 meters. It said the new data confirmed that the potential of the ore body is higher than thought prior to the retesting programme.
Victoria Oil & Gas (AIM: VOG) announced that George Donne is taking a 12 month leave of absence and is stepping down from his position as executive director to “pursue his passion for hiking and mountaineering,” while Jonathan Scott-Barrett will join the management as commercial director, reporting to the board.
Gulfsands Petroleum (AIM: GPX) confirmed that the latest offer approach, made on 18 March, was priced at 315p per share for the company’s entire share capital. The company reiterated that proposal is wholly inadequate, highly conditional and materially undervalues Gulfsands.
Ascent Resources’ (AIM: AST) Hungarian-based subsidiary PetroHungaria kft has begun production from the PEN-105 well in the Penészlek area of the Nyírség permits. Production from the well is expected to stabilise at over 2mmscfd (million standard cubic feet per day) within a few days. PEN-105 was completed and shut-in in December whilst the company connected it to the main export pipeline and completed drilling of the nearby PEN-101 well.
London-based stockbroker Fairfax Securities said that Discovery Metals (AIM: DME, ASX: DML) has a strong management team that has consistently delivered on promises, following recent news-flow. The company recently secured a AU$19m investment and off-take agreement with an international raw materials trading company, Transamine.
Northern Petroleum’s (AIM: NOP) Dutch subsidiary Northern Petroleum Nederland (NPN) will acquire the respective interests of Nederlandse Aardolie Maatschappij (NAM) and Dyas and assume operatorship of the Zuid-Friesland III production license, which has been granted to NAM and Dyas along with Total (NYSE: TOT) and Petro-Canada.
Edison Investment Research has started coverage of Goldplat (AIM: GDP), which it called almost unique among gold producers, as it recovers rather than mines gold. According to Edison, Goldplat’s stockpile of ore is constantly evolving, rather than slowly depleting.
http://www.proactiveinvestors.co.uk/companies/news/14783/ftse-100-trims-gains-as-us-existing-home-sales-decline-uk-inflation-falls-14783.html
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