Overview: the FTSE 100 was flat in mid afternoon as a strong performance from retailers and banking stocks was offset by losses in the telecom and insurance sectors.
Part-nationalised bank Lloyds (LSE: LLOY) was in the lead with a 3.5% climb, while sector peer Barclays (LSE: BARC) and supermarket chain Sainsbury’s (LSE: SBRY) also made it to the top three, climbing 3% and 2.5% respectively.
Another retail Morrison (LSE: MRW) tacked on more than 1.5%, as did interdealer broker ICAP (LSE: IAP) and software developer Sage Group (LSE: SGE). Other notable risers included plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and Associated British Foods (LSE: ABF) with gains of over 2%.
Mobile satellite company Inmarsat (LSE: ISAT) was the heaviest faller among the blue chips with a 3% decline. Another telecom stocks Vodafone (LSE: VOD) and BT (LSE: BT) were down 2.5% and 2% respectively. Other notable fallers included technology company Smiths Group (LSE: SMIN) and outsourcing company Capita Group (LSE: CPI), which both lost more than 2%.
Wall Street is poised for a lower open as futures for the Dow Jones Industrial Average slid 0.3%, while S&P 500 and NASDAQ futures inched slightly lower in anticipation of Friday’s US jobless data.
Oil prices retreated after rising above US$83/barrel after a colder than expected winter drove up the demand for heating oil, helping crude prices to 14 month highs. The prices were then pressured by demand concerns for the next year amid unclear recovery prospects along with an update from the US Department of Energy, which said that crude inventories rose 1.3 million barrels last week, while a 1.6 million decrease was expected following five weeks of declines.
February Brent Crude slid to US$81.22/barrel, while US light, sweet crude was down to US$82.52/barrel after reaching US$83.10/barrel.
Oil and gas companies didn’t show much movement in the morning. BG Group (LSE: BG) led the sector in the FTSE 100 with a gain of nearly 2%. BP (LSE: BP) posted a marginal gain, while fellow supermajor Shell (LSE: RDSB) remained flat, as did Cairn Energy (LSE: CNE).
Tullow Oil (LSE: TLW) lost slightly less than 1%.
Petrofac (LSE: PFC) declined marginally, while fellow services company Amec (LSE: AMEC) was little moved.
Heritage Oil (LSE: HOIL) was the top performer among the midcap energy companies with a 5% advance. Premier Oil (LSE: PMO) and JKX Oil & Gas (LSE: JKX) followed with gains of 3% and 2% respectively. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) both added 1%.
Sector peers Melrose Resources (LSE: MRS), Salamaner Energy (LSE: SMDR) and Soco International (LSE: SIA) held steady.
Kazakhstan operating Max Petroleum (LSE: MXP) was the top performer among the juniors with a 7.5% climb. Energy investor Xtract Energy PLC (AIM: XTR) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) improved 6% and % respectively.
Oil and gas company with assets in Iraq, Syria and Gulf of Mexico Gulfsands Petroleum (AIM: GPX) tacked on 3.5%.
Europe focused oil and gas developer Ascent Resources (AIM: AST), North America focused oil & gas junior Pantheon Resources (AIM: PANR) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) headed in the opposite direction, shedding 6.7%, 5% and 3% respectively.
Miners mixed as gold, silver and platinum trim gains
Precious metals slightly retreated after rising overnight and in the morning. Gold improved in the morning as did other precious metals after the US Dollar further weakened on the mixed economic data that came out in the US yesterday.
The ADP (Automatic Data Processing) released its National Employment Report, putting private jobs cuts for December at 84,000, which signalled an improvement from 169,000 in November, though was roughly 10,000 more than expected, while minutes of the December meeting of the Federal Reserve also sent mixed signals as some members appeared to be in favour of upping the scale of the US$1.25 trillion mortgage-buying programme instead of letting it expire as scheduled in March. The Fed also appeared to be reluctant to consider a revision of interest rates anytime soon, sending the US Dollar down to make precious metals a more attractive investment.
Gold was at US$1,130/oz, while silver and platinum settled at US$18.10/oz and US$1,548/oz respectively.
Mining stocks were mixed. Gold miner Randgold Resources (LSE: RRS) slid 1.3%, while silver miner Frensillo (LSE: FRES) tacked on 1%. Platinum producer Lonmin (LSE: LMI) also was in decline, posting a small loss.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) also declined marginally.
In the FTSE 250, silver producer Hochshild Mining (LSE: HOC) gained nearly 1%, while gold miner Petropavlovsk (LSE: POG) remained flat. Aquarius Platinum (LSE: AQP) was at the bottom of the pile with a 2% loss.
Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) led the juniors with a 14% surge, while Uzbekistan focused gold miner Oxus Gold (AIM: OXS), copper and gold miner EMED Mining (AIM: EMED) and Latin American precious metal miner Minera IRL (AIM: MIRL) followed, advancing 7%, 6% and 4% respectively.
African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) and Africa focused gold miner Pan African Resources (AIM: PAF) both gained more than 3%.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) slid 7.5% on no news. Africa operating gold miner GMA Resources (AIM: GMA), Iran focused gold explorer Persian Gold (AIM: PNG) and Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) followed with losses of 6.5%, 6% and 5.5% respectively. South American based explorer Mariana Resources (AIM: MARL) was down 4%.
Copper and nickel slide
Base metals were in retreat with copper and nickel sliding to US$3.43/lb and US$8.46/lb, while zinc slipped below US$1.20/lb.
Most base metals focused miners were in decline today. Eurasian Natural Resources (LSE: ENRC) led the retreat, shedding 1.8%, while Antofagasta (LSE: ANTO) was down 1.3%. BHP Billiton (LSE: BLT) declined 1%, while Anglo American (LSE: AAL), Rio Tinto (LSE: RIO) and Xstrata (LSE: XTA) declined marginally and Vedanta Resources (LSE: VED) was flat.
Kazakhmys (LSE: KAZ) went against the tide with a marginal gain.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the sector, shedding 1.9%.
South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR) led the sector with a 20% rally. Zinc miner Connemara Mining (AIM: CON) climbed 3.5%.
Banks, insurance, private equity
Financial stocks were mixed today. Lloyds (LSE: LLOY) led the banking sector with a 3.5% advance, while Barclays (LSE: BARC) followed, climbing 3%.
Standard Chartered (LSE: STAN) slid 1.3%, while HSBC (LSE: HSBA) and Royal Bank of Scotland (LSE: RBS) lost less than 1%.
Most insurance were in selling mode today. Prudential (LSE: PRU) and Standard Life (LSE: SL) declined 2%, while Aviva (LSE: AV) shed 1% and Admiral Group (LSE: ADM) and Old Mutual (LSE: OML) declined marginally.
Private equity group 3i (LSE: III) added less than 1%.
Small Cap Movers
Other notable movers among the small caps included renewable energy developer SeaEnergy (AIM: SEA), which surged 18%, and Latin America operating power producer Rurelec (AIM: RUR) witha 5% gain.
Large and Mid Cap News
AstraZeneca (LSE: AZN) settled its patent litigation with Teva Pharmaceutical Industries (NASDAQ: TEVA) in respect of Teva's proposed generic version of AstraZeneca's Nexium delayed-release capsules (esomeprazole magnesium). The US generic drug-maker conceded that all patents-at-issue in Teva's US Nexium patent litigations are valid and enforceable.
In its third quarter trading statement for the 13 weeks to January 2 2010, UK supermarket giant Sainsbury (LSE: SRBY) revealed a company record Christmas trading performance which helped drive strong total sales growth of 6.2%. In the seven days leading up to Christmas the FTSE100 retailer served a record 24 million customers.
The Davis Service Group PLC (LSE: DVSG) has made two strategic acquisitions for a total of £44.5 million, including £2.5 million in deferred payments beyond 2010. The European dry cleaning and textile maintenance business has expanded its operations in Germany and Scandinavia with the deals.
Homebuilder Persimmon (LSE: PSN) re-affirmed its confidence in the long term future of the UK housing market. In a trading update ahead of reporing results for the year ended 31 December 2009, Persimmon revealed turnover of approximately £1.4 billion from the completion of 8,976 new home sales, with an improving sales performance in the second half.
International support services company Serco Group (LSE: SRP) has signed a £80 million contract with the South East England Development Agency (SEEDA) to provide Business Link services across the South East
Oil and gas engineering services group Wellstream Holdings (LSE: WSM) said it has delivered revenues ahead of last year and the company’s good performance is in-line with expectations. In a pre-close update for the year ended 31 December 2009, the FTSE250 group said it is well positioned to capitalise on its significant growth opportunities.
Small Cap News
Africa focused gold miner Pan African Resources (AIM: PAF; JSE: PAN) said that discussions in respect of a previously flagged possible transaction are still in progress.
San Leon Energy (AIM: SLE) has tapped into Iraq's potential with a joint venture with Baghdad-based Al Meinaa Oil Services Limited for joint evaluation of oil and gas projects in the country.
Synchronica (AIM: SYNC) is looking to build on the strong performance of 2009 in 2010, calling it the year of emerging markets-driven mobile internet revolution and projecting dramatic growth of mobile email, which is the core segment of the company’s business.
Speciality antimicrobial research group Syntopix (AIM: SYN) said revenues have jumped 34.8% in the financial year to end-July 2009 after new commercial agreements were reached to help slash operating losses, with the company planning to undertake an equity issue to capitalise on further opportunities in the market.
President Petroleum (AIM: PPC) plans to undertake a three exploration well drilling programme at the PEL 82 oil and gas licence in Australia after seismic data confirmed its prospectivity, and will work on amending the work programme for the PEL 132 licence to ensure its retention.
Drax power station operator Drax Power Limited (AIM: DRX) and eaga (AIM: EAGA) announced an exclusive three-year agreement for the outsourced delivery of the power generator’s entire Community Energy Savings Programme (CESP) commitment.
In its interim results statement for the six months ended 31st October 2009, AIM listed West African Diamonds (AIM: WAD) said it has done well as it progresses with its merger with Stellar Diamonds. During the period the Bomboko diamond mine in Guinea came on stream and the company made a number of strategic developments. The junior diamond producer said it will continue to grow through consolidation activity.
Northern Petroleum (AIM: NOP) has brought its Geesbrug gas field in the Netherlands on stream to add 307 bcf (billion cubic feet) of gas to production, marking the start of what it said will be a period of “satisfying revenue growth.”
Disclosure: The author does not hold positions in the company