AP: FTSE 100 Climbs As UK Jobless Claims Fall, US Futures Up Ahead Of Fed Policy Statement
Overview: the FTSE 100 unexpectedly rose in early trade, climbing 0.3% after an update from the Office for National Statistics revealed that the number of jobless claims in the UK decreased by 6,300 to 1.63 million in November, marking the first month of decline since February last year, while experts polled by Bloomberg expected an increase of 12,500.
Insurance investor Resolution (LSE: RSL) led the blue chips, advancing 5%. Support services company Rentokil Initial (LSE: RTO) was a distant second, climbing 3%, while engineering group Amec (LSE: AMEC) followed with a 2.5% gain. Other notable risers included commercial property companies Hammerson (LSE: HMSO) and Segro (LSE: SGRO), software developer Autonomy Corporation (LSE: AU), publisher Reed Elsevier (LSE: REL) and security solutions group G4S (LSE: GFS), which all added more than 1.5%.
Just three FTSE 100 constituents lost more than 1% today. Beverage group Diageo (LSE: DGO) was at the bottom of the pile, sliding 2%, while United Utilities (LSE: UU) and beverage group SABMiller (LSE: SAB) followed with gains of 1.5% and 1% respectively.
Stock index futures rose in the US as investors are waiting for the outcome of the Federal Reserve’s ongoing two-day policy meeting, which is set to conclude after the market close in London. No major changes to the current monetary policy including the low interest rates are expected.
Futures on the Dow Jones Industrial Average, the broader S&P 500 index and the technology focused Nasdaq composite all edged higher this morning.
Commodities
Oil prices rose today with January Brent Crude climbing to US$73.03/barrel, while US light, sweet crude improved to US$71.40/barrel.
Major oil and gas stocks didn’t show much movement this morning. BG Group (LSE: BG) and Cairn Energy (LSE: CNE) advanced 1%, as did Royal Dutch Shell (LSE: RDSB), while fellow supermajor BP (LSE: BP) was flat. Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) posted marginal gains.
Midcaps Dragon Oil (LSE: DGO) and Dana Petroleum (LSE: DNX) were flat, while fellow FTSE 250 constituent Heritage Oil (LSE: HOIL) declined marginally.
Some juniors companies were resilient in early trading with Kazakhstan operating Max Petroleum (LSE: MXP), Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and Iraq operating Irish oil company Petrel Resources (AIM: PET) taking the lead in the sector, advancing 10.2%, 9.6% and 8.7%, respectively.
Africa focused energy company Dominion Petroleum (AIM: DPL) and Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) moved in the opposite direction, sliding 4.5%, while Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was down 4%.
Gold, silver and platinum advance
Precious metals were on the rise today as gold reached US$1,132/oz, while silver and platinum improved to US$17.49/oz and US$1,446/oz, respectively.
All major mining stocks rose today with the exception of silver producer Fresnillo (LSE: FRES), which remained flat. Fellow FTSE 100 constituents gold miner Randgold Resources (LSE: RRS) and platinum miner Lonmin (LSE: LMI) added about 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) tacked on nearly 2%.
Gold miner Petropavlovsk (LSE: POG) took the lead in the sector in the FTSE 250, advancing 2.5%, while silver producer Hochschild Mining (LSE: HOC) and Aquarius Platinum (LSE: AQP) followed, climbing 2% and 1.5%, respectively.
Western Australia operating junior Norseman Gold (AIM: NGL), which is set to reaffirm its operational targets at an AGM (annual general meeting) to be held tomorrow, and Uzbekistan focused gold miner Oxus Gold (AIM: OXS) moved along with gains of 7%, while Argentina focused gold explorer Patagonia Gold (AIM: PGD) followed with a 4.5% climb.
Not all small caps moved with the sector as Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) was in correction, shedding 16% on no news, while Turkey focused gold miner Ariana Resources (AIM: AAU), commodity asset development company Mercator Gold (AIM: MCR) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) also were in decline with losses of 7%, 6% and 4%, respectively.
Copper and nickel rise to lift miners
Base metals were on the rise today as copper and nickel improved to US$3.12/lb and US$7.70/lb respectively, as zinc held steady at US$1.03/lb.
Base metal focused stocks were on the rise today. Kazakhmys (LSE: KAZ) and Xstrata (LSE: XTA) were the top performers in the sector in the FTSE 100 with gains of 1.6%. Anglo American (LSE: AAL) and Vedanta Resources (LSE: VED) were up 1.2%, while Antofagasta (LSE: ANTO), Eurasian Natural Resources (LSE: ENRC) and Rio Tinto (LSE: RIO) added 1%.
BHP Billiton (LSE: BLT) went against the tide, posting a marginal loss.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed the sector, advancing 2.3%.
Zinc mining and recycling specialist ZincOX (AIM: ZOX) and Australia focused coking coal producer Caledon Resources (AIM: CDN) emerged as the top performers among the small caps, climbing 8.5% and 8%, respectively. Russia focused copper and nickel miner Amur Minerals (AIM: AMC) added 5.5%.
Specialty minerals exploration and development company Thor Mining (AIM: THR) and Indonesia operating coal miner Churchill Mining (AIM: CHL), which did not release any updates today were in correction with losses of 11% and 7%, respectively.
Banks, insurance, private equity
The banking sector was in buying mode today with HSBC (LSE: HSBA), Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) climbing 1%, while Standard Chartered (LSE: STAN) rose marginally. Barclays (LSE: BARC) took the lead with a 2% advance.
Insurance stocks also were in demand this morning. RSA Insurance Group (LSE: RSA), Prudential (LSE: PRU) and Legal & General Group (LSE: LGEN) were in the lead with gains of 2%, 1.5% and 1%, respectively. Admiral Group (LSE: ADM) and Standard Life (LSE: SL) rose marginally, while Old Mutual (LSE: OML) held steady.
Aviva (LSE: AV) was at the bottom of the pile with a marginal loss.
Private equity group 3i (LSE: III) rose marginally.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP) with an 11% decline and direct marketing software developer smartFOCUS (AIM: STF), which climbed 9% after saying it would likely beat full year expectations following a series of contract wins.
Large and Mid Cap News
In it pre-close statement British coal-fired power plant operator, Drax (LSE: DRX) said it anticipates full year earnings to be modestly ahead of expectations. According to the FTSE 250 electricity generator, the flexibility and reliability of its operations along with a strong forward contracted position have enabled it to overcome historically low spreads in the UK market.
In an interim management statement, British pub group Punch Taverns (LSE: PUB) said it continues to be materially impacted by the difficult economic conditions. In the 16 weeks to the 12 December 2009 revenues have continued to be pressured in both leased and managed businesses. However the FTSE250 constituent’s non-core pub disposal programme is progressing well, as a result the board has raised its full year disposal estimate to £300 million.
International power system engineers, Rolls-Royce (LSE: RR.) announced a new contract to supply Aviation Capital Group (ACG) with its Trent 1000 engine to power five Boeing 787 Dreamliners . The $170 million order is the first contract between the companies. Boeing’s (NYSE: BA) next generation aircraft made its maiden flight on Tuesday.
In its half yearly results, Comet’s parent company Kesa Electricals (LSE: KESA) reported that group revenue increased by 7.6% to £2.3 billion, improved profitability and further strengthened its balance sheet.
UK listed pharmaceuticals giant, AstraZeneca (LSE: AZN) has announced further progress on its supplemental new drug application for CRESTOR, the cardiovascular disease treatment. The US Food and Drug Administration’s (FDA) Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) gave a majority vote in the drug’s favour.
Petrofac Ltd (LSE: PFC) said it expects to report a 25 percent year-on-year rise in net profit for the twelve months to end-December 2009 to at least US$330 million, as a result of its success in securing new contracts during the year and the continued good progress across most of its businesses.
Small Cap News
Allocate Software (AIM: ALL) has completed the acquisition of Swedish-based provider of workforce management software Time Care AB, marking the commencement of its expansion into Europe.
Strategic Natural Resources (AIM: SNR) said that RAB Capital plc, acting as discretionary manager of RAB Energy Fund Limited and RAB Octane Fund Limited, acquired an indirect interest in 3.4 million shares in the company, bringing its total interest up to 6.8 million, which is equivalent to 9.05% of the total issued share capital.
Degradable plastics and waste-to-energy company Symphony Environmental Technologies PLC (AIM: SYM) announced a 15 year agreement for Morocco to distribute plastic products incorporating its d2w biodegration additives.
SmartFOCUS (AIM: STF) is expecting its full year results to be ahead of market consensus following recent contract wins, including the deal with financial services group Liverpool Victoria (LV=) secured earlier this month to streamline its entire marketing strategy.
Westhouse Securities has put a ‘buy’ rating on Wessex Exploration PLC (PLUS: WX.P) which listed this week, saying the shares offer “excellent high risk upside”, mainly due to its exposure to a Guiana offshore licence operated by Tullow Oil PLC (LSE: TLW).
In his address prepared for tomorrow's AGM (annual general meeting), Norseman Gold’s (AIM & ASX: NGL) Chairman Vince Pendal will reaffirm the company’s operational targets, while prioritizing increasing production and reducing costs for the upcoming year.
Futura Medical (AIM: FUM) said commercial negotiations over its pain relief product TPR100 were underway with a major pharmaceutical business following the completion of in vitro studies, while enhanced sexual control product PET500 could now be marketed in the US without any additional clinical data being required.
