AFP: Gold, Silver And Platinum Rise To Bolster Miners, FTSE 100 Climbs 0.8%
Overview: the FTSE 100 extended yesterday’s gains, rising 0.8% in the morning, mostly driven by gains in the mining sector as metal prices recovered. The Footsie, which was expected to gain just a few points in pre-trade projections, was lifted by today’s update on the producer prices from the Office for National Statistics, which said that output producer prices showed the largest increase in nine month, rising 0.2% from October and 2.9% year on year, largely due to higher fuel prices.
More economic data is due out today, including US retail sales data for November and the first reading of the University of Michigan confidence survey.
Miner Kazakhmys (LSE: KAZ) emerged atop the leaderboard with a 4% gain. Fellow base metal focused miner Vedanta Resources (LSE: VED) and power generation company International Power (LSE: IPR) also made it to the top three, climbing 3.5%.
Other notable risers included communications services group WPP (LSE: WPP) and broadcaster BSkyB (LSE: BSY), which both gained more than 3%.
Just two FTSE 100 constituents lost more than 1% this morning. Home Retail Group (LSE: HOME) was down 2%, while insurer Legal & General (LSE: LGEN) retreated 1.5%. Hedge fund manager Man Group (LSE: EMG), supermarket chain Morrison (LSE: MRW), chocolatier Cadbury (LSE: CBRY) and telecom groups BT (LSE: BT) and Cable & Wireless (LSE: CW) also were in decline with small losses.
Stock index futures in the US climbed following a positive update from China, where the rate of export declines narrowed to just 1.2% last month after dropping 13.8% in October. Futures for the Dow Jones Industrial Average, the broader Standard & Poor’s 500 index and the technology heavy Nasdaq composite rose 0.5%.
Commodities
Oil prices inched slightly higher following another round of declines. January Brent Crude improved to US$72.39/barrel, while US benchmark crude recaptured the US$71/barrel mark.
Major oil and gas stocks mostly rose with the sole exception of BG Group (LSE: BG), which posted an insignificant loss.
Petrofac (LSE: PFC) was in the lead with a 2.3% advance. Tullow Oil (LSE: TLW) gains 1%, as did BP (LSE: BP), while fellow supermajor Shell (LSE: RDSB) rose marginally. Cairn Energy (LSE: CNE) tacked on less than 1%.
Midcaps also were mixed. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) performed well, rising 1.2%, while Heritage Oil (LSE: HOIL) shed less than 1%.
Irish oil and gas exploration company Petroceltic International (AIM: PCI) led the juniors with a 7.5% climb, while Mongolia-focused Petro Matad Ltd (AIM: MATD) followed with a 3.5% advance.
Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) headed in the opposite direction, sliding 5.5%. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) dropped 3.5%.
Miners rgain as gold, silver and platinum rise
Precious metals rose this morning as gold reached US$1,140/oz, while silver and platinum climbed to US$17.54/oz and US$1,441/oz respectively.
Platinum producer Lonmin (LSE: LMI) led the mining sector with a gain of nearly 4%, while silver miner Fresnillo (LSE: FRES) and gold producer Randgold Resources (LSE: RRS) followed, advancing 3% and 2.3%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) climbed 2%.
Gold miner Petropavlovsk (LSE: POG) took the lead in the sector in the FTSE 250 with a 3.5% improvement. Fellow midcaps Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) added 2.3% and 1.2%, respectively.
Commodity asset development company Mercator Gold (AIM: MCR) led the sector, hiking 40% after releasing assay results from its Copper Flat project. Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF), Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) were in decline, slipping 6.7%, 4.5% and 3.5%, respectively.
Copper and nickel rise
Base metals also improved with copper and nickel reaching US$3.10/lb and US$7.33/lb respectively, while zinc held steady at US$1.03/lb.
Kazakhmys (LSE: KAZ) and Vedanta Resources (LSE: VED) emerged as the top performers among the base metal focused stocks, gaining 4% and 3.5%. Antofagasta (LSE: ANTO) and Xstrata (LSE: XTA) followed with gains of 3%. Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) rose 2.5% and Rio Tinto (LSE: RIO) added 2%, while Eurasian Natural Resources (LSE: ENRC) lagged behind with a 1.5% improvement.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) rose marginally.
Laterite nickel specialist European Nickel (AIM: ENK) and iron ore focused investor Red Rock Resources (AIM: RRR) led the juniors, rallying 9% and 8%, while copper and nickel explorer Regency Mines (AIM: RGM) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) climbed 6% and 4%, respectively.
Cement operator Prosperity Mineral Holdings (AIM: PMHL) slid 3.5%.
Banks, insurance, private equity
Major banking stocks were mixed this morning. Standard Chartered (LSE: STAN) led the sector with a 1.5% advance. Barclays (LSE: BARC) and Royal Bank of Scotland (LSE: RBS) were flat, while Lloyds (LSE: LLOY) and HSBC (LSE: HSBA) declined marginally.
Insurers also headed in different directions. Admiral Group (LSE: ADM) decline marginally, while Legal & General (LSE: LGEN) sank to the bottom of the pile with a 2% loss. Old Mutual (LSE: OML) was flat, while Prudential (LSE: PRU) and RSA Insurance Group (LSE: RSA) both gained less than 1% and Aviva (LSE: AV) and Standard Life (LSE: SL) rose 1.4%.
Private equity group 3i (LSE: III) added 1.2%.
Large and Mid Cap News
In its first half results report for the 26 weeks ended 24 October, UK retailer HMV Group plc (LSE: HMV) said it narrowed its losses but continues to operate in challenging and highly competitive markets, however the HMV UK & Ireland business remains on track, and it is confident in the outlook for the current year.
In a pre-close statement, construction and support service company Carillion PLC (LSE: CLLN) said it is performing strongly in challenging market conditions. For the 12 months to 31 December, the FTSE250 constituent expects underlying earnings per share to grow by at least 10%.
Costa Coffee parent company, Whitbread Plc (LSE: WTB) confirmed it is in advanced discussions regarding a possible 24p per share offer for Coffeeheaven international (AIM: COH). The European coffee bar operator jumped more than 11% immediately after the announcement.
Small Cap News
Fusion IP PLC (AIM: FIP) the university commercialisation company which turns university research into business, said MedaPhor, which is developing an ultrasound training device, has raised £190,000, including £75,000 each from Fusion and Finance Wales PLC.
Broker Westhouse initiated coverage of Discovery Metals (AIM: DME, ASX: DML), giving the Botswana operating nickel and copper miner a “buy” rating and setting a target price of 35.25 pence, calling its core asset Boseto “an excellent copper project with plenty of upside.”
South America focused gold producer Minera IRL Ltd (AIM: MIRL) said executive chairman Courtney Chamberlain bought a further 20,000 shares in the company at 97 US cents each.
Shares in Mercator Gold (AIM: MCR) rallied 20% after the company updated the market on the evaluation of the Copper Flat project in New Mexico, where assaying of historic drill core and pulp residues has so far showed “good conformity with historic drill results” that were used for the estimation of the project.
ValiRx (AIM: VAL) has entered an equity line of credit (ELOC) agreement with US based Dutchess Opportunity Fund, allowing it to raise £3 million of equity capital in drawdowns over two years.
Shares in Hallin Marine Subsea International (LSE: HMS) (‘Hallin’), surged over 75% this morning following the announcement of a proposed takeover bid of 233p per share from Superior Energy Services (NYSE: SPN). The recommended cash offer represents an 87% premium on the closing price on the 10th December.
Rusina Mining NL (AIM: RMLA, ASX: RML) and its joint venture partner European Nickel PLC (AIM: ENK) jointly announced that the Acoje nickel heap leach trial pad and pilot plant was officially opened on December 9 2009 on Luzon Island in the Philippines.
