Overview: the FTSE 100 was in retreat today, shedding 0.3%, though still remaining above the 5,500 mark it captured on the first day of trading in 2010. The UK blue chip index was tracking yesterday’s losses on Wall Street, where the Dow Jones Industrial Average finished with a 0.1% decline on mixed data.
The US Commerce Department said yesterday that factory orders rose by 1.1% in November against the expected improvement of 0.5%, however, housing data turned out to be weak as the National Association of Retailers reported a 16% decline in its index of pending home sales.
Plumbing and heating equipment manufacturer Wolseley (LSE: WOS) emerged atop the leaderboard with a 4.5% advance. Bailed out bank RBS (LSE: RBS) continued its climb, adding a forther 3% on top of the 10% gains it posted on Monday and Tuesday. Software developer Autonomy Corporation (LSE: AU) also made it to the top three with a 2.4% improvement. Other notable risers included turbine manufacturer Rolls Royce (LSE: RR), which added more than 2% as well as telecom groups BT (LSE: BT) and Cable & Wireless (LSE: CW) with gains of 1.5% and defence contractor BAE Systems (LSE: BA), which climbed 1.2%.
Retailer Marks and Spencer (LSE: MKS) was the heaviest faller in the index with a 5.5% decline after publishing a trading update for Q3 with a lesser than expected increase in like for like sales. Oil and gas services firm Petrofac (LSE: PFC) followed with a 3% slide after Morgan Stanley (NYSE: MS) downgraded the stock to “underweight” from “equal-weight.” Other notable fallers included asset management firm Schroders (LSE: SDR), National Grid (LSE: NG) and property company Segro (LSE: SGO), which all lost 2%.
Wall Street is poised for a lower open despite today’s update from Automatic Data Processing (NASDAQ:ADP) showed an 84,000 decline in private sector employment in December, which was less than expected.
Futures for the Dow Jones Industrial Average, the broader S&P 500 index and the technology heavy NASDAQ composite inched stood slightly lower prior to the market open.
Oil prices inched slightly lower today following Tuesday’s gains as February Brent Crude slid to US$80.39/barrel, while US light, sweet crude declined to US$81.62/barrel.
The decline in oil prices was triggered by yesterday’s update from the API (American Petroleum Institute), which revealed an unexpected increase in distillate supplies by 1 million barrels and in gasoline inventories by 5.6 million barrels. This was enough to offset any positive impact from the fall of 2.3 million barrels in US crude stocks.
Major oil stocks retreated in response to lower oil prices. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) lost less than 1%, as did fellow FTSE 100 constituents BG Group (LSE: BG) and Cairn Energy (LSE: CNE), while Tullow Oil (LSE: TLW) was down 1%.
Amec (LSE: AMEC) was flat, while another services company Petrofac (LSE: PFC) slid to the bottom of the pile with a 3% loss.
Midcap energy producers were mixed. JKX Oil and Gas (LSE: JKX) and Dana Petroleum (LSE: DNX) were down about 1%, while Premier Oil (LSE: PMO) declined marginally. Dragon Oil (LSE: DGO) and Salamander Energy (LSE: SMDR) did better, tacking on nearly 1%, as did Wood Group (LSE: WG), which fellow services company Wellstream Holdings (LSE: WSM) declined 1.3%.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was oneof the strongest performers among the juniors with a 6% climb after updating the market on progress at its flagship Logbaba gas project in Cameroon.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Kazakhstan operating Max Petroleum (LSE: MXP) headed in the different direction, shedding 11% and 9% respectively. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) both lost more than 4.5%.
Gold holds on as silver and platinum climb
Gold prices were at about the same level as yesterday with the yellow metal holding steady at around US$1,120/oz. Other precious metals slightly improved with silver and platinum reaching US$17.90/oz and US$1,536/oz respectively.
Gold stabilized at the current level after bouncing back from yesterday’s falls despite a stronger US Dollar as Tuesday’s decline spurred demand for precious metals.
Holdings in the world’s largest exchange-traded fund SPDR Gold Trust fell to 1,128.75 metric tonnes on Monday, marking a decline of 4.87 metric tonnes from the end of 2009.
Major mining stocks were mixed today. In the FTSE 100, gold miner Randgold Resources (LSE: RRS) was flat, while silver producer Fresnillo (LSE: FRES) posted a marginal gain and platinum miner Lonmin (LSE: LMI) shed almost 1%.
Midcaps were in decline. Gold miner Petropavlovsk (LSE: POG) was at the bottom of the pile with a 2% loss, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) declined marginally.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) was one of the top performers among the small caps with a 6% gain. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) followed, advancing 4%.
Copper and nickel rise, but miners mixed
Base metals advanced today as copper and nickel reached US$3.44/lb and US$8.51/lb, while zinc improved to US$1.18/lb.
Base metals focused stocks were mixed today. Anglo American (LSE: AAL), Kazakhmys (LSE: KAZ) and Rio Tinto (LSE: RIO) posted small gains, while Antofagasta (LSE: ANTO), BHP Billiton (LSE: BLT) and Eurasian Natural Resources (LSE: ENRC) declined marginally. Vedanta Resources (LSE: VED) and Xstrata (LSE: XTA) were flat.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) lost 3.5% on no news.
Botswana operating nickel and copper miner Discovery Metals (AIM: DME) was one of the top performers among the small caps today with a 6% gain. Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) followed, tacking on 4.5%. Nickel and iron ore exploration junior Landore Resources (AIM: LND) and Philippines focused nickel and copper miner Metals Exploration (AIM: MTL) advanced 3.5%.
Iron ore focused investor Red Rock Resources (AIM: RRR) and London Mining (AIM: LOND) climbed 3%.
Banks, insurance, private equity
Financial stocks were mixed today. Royal Bank of Scotland (LSE: RBS) led the banking sector with a 3% gain, while fellow part-nationalised bank Lloyds (LSE: LLOY) and Barclays (LSE: BARC) followed with gains of less than 1%.
HSBC (LSE: HSBA) was flat and Standard Chartered (LSE: STAN) declined 1.3%.
Most insurance stocks were in buying mode today. RSA Insurance Group (LSE: RSA) and Aviva (LSE: AV) took the lead, advancing 2.4% and 1.1% respectively. Prudential (LSE: PRU) and Legal & General (LSE: LGEN) followed with insignificant gains, while Old Mutual (LSE: OML) and Standard Life (LSE: SL) were flat.
Admiral Group (LSE: ADM) retreated 2%.
Private equity group 3i (LSE: III) made little headway.
Large and Mid Cap News
Business infrastructure software provider Autonomy Corp PLC (LSE: AU) said it expects to report 2009 full-year results in line with analyst consensus estimates of revenues of approximately US$740 million and adjusted EPS of US$0.97.
Retailer Marks and Spencer (LSE: MKS) said today its sales rose for the first time in two years, reporting a 2.6% increase in total group sales for the quarter ending 26 December, while UK sales improved 2.3% and like-for-like sales added 0.8%, with online sales soaring 32%, which the retailer called a successful performance during the important Christmas period.
Insurer Prudential (LSE: PRU) has entered a 12 year strategic partnership with United Overseas Bank Limited to develop a regional bancassurance business to distribute its life investment, savings and protection insurance products through UOB’s 414 bank branches across Singapore, Indonesia and Thailand, and also agrees to acquire UOB Life Assurance in Singapore for £192 million in cash.
Small Cap News
KEFI Minerals PLC (AIM: KEFI) said it has started a drilling programmes at the Bakir Tepe project in southwest Turkey with the aim of testing a large geophysical anomaly that is interpreted to potentially be related to a Cyprus-style copper-gold volcanic-hosted massive sulphide (VHMS) deposit.
Alliance Pharma PLC (AIM: APH) said trading during the last few months of the 2009 financial year remeined strong and as a result, it now expects to report turnover for the full year to 31 December 2009 of approximately £31 million, an increase of approximately 42 percent on the previous year.
Synchronica (AIM: SYNC) has said it has had an “active year-end,” having signed contracts and delivered orders to customers during late December, expecting the related revenue to be recognized in 2009.
Victoria Oil & Gas (AIM: VOG) said well La-105 at its flagship Logbaba gas project in Camroon has reached a total depth of 8,920 ft (feet), having encountered multiple gas bearing sands at depths between 6,017 ft and 8,330 ft that could be correlated to those found and tested in the nearby well La-103, which flowed at rates from 5 to 12 mmcf/d (million cubic feet per day) of gas from individual sands when drilled in 1956.
Central China Goldfields PLC (AIM: GGG) said it was notified by chairman Peter Ruxton that he bought a further 250,000 shares in the company today at 2.75 pence a share. He notified the group only two days ago that he bought 17,336 ordinary shares on December 10 at 2.8p per share.
West China Cement Limited (AIM: WCC) has acquired Shaanxi Xiushan Cement Limited Company for Rmb 180 million (£16.5 million), comprising the Xiushan cement plant in the Shaanxi province in proximity to its Ankang and Lantian plants and the Xunyang Xiushanlong cement milling facility.
African Minerals Ltd (AIM: AMI) said the mineral exploration and development company with significant iron ore and base metal interests in Sierra Leone, West Africa, said it has entered into a conditional strategic agreement with state-owned China Railway Materials Commercial Corp (NYSE:CRM) in respect of AML's flagship iron ore project at Tonkolili and the related infrastructure projects.
The significance of gas shale plays in the United States was reiterated once again this morning, when Endeavour International Corp (NYSE Amex: END & LSE: ENDV) announced that it would shell out US$27 million to gain a larger foothold in the Haynesville and Marcellus gas shale plays in Louisiana/Texas and Pennsylvania. Endeavour also snapped up stakes in two frontier gas shale plays in Alabama and Montana as part of the deal, which will see the company acquire interests in approximately 526,000 gross acres (165,000 net).
Broker Fox-Davies Capital (FD Capital) noted the announcement made by Latin American precious metal miner Minera IRL (AIM: MIRL) last month of the completion of the acquisition of Hidefield Gold PLC (AIM: HIF), with the broker upholding its 'buy' recommendation and its target price of £0.90.
SeaEnergy (AIM: SEA) said The Crown Estate has notified of its intention to select the joint venture of its 80% owned subsidiary SeaEnergy Renewables Ltd as one of the zone partners in the third offshore wind farm leasing round in the UK (UK Leasing Round 3).
Disclosure: I do not hold a position