Overview: just as was expected, the FTSE 100 was on the rise in early trade, rallying 1.5% after Wall Street closed higher the day before with the Dow Jones industrial average adding 1.2%, while S&P 500 and Nasdaq composite rose 0.9%. The recovery sentiment was further improved by the Reserve Bank of Australia, which unexpectedly lifted its interest rate by 25 basis points.
Oil and metals prices reacted by inching higher to boost the mining and energy sectors, which were off to a strong start this morning.
Mining companies dominated the leaderboard with copper miner Kazakhmys (LSE: KAZ) furmly in the lead with a 7.2% rally. Fellow copper producer Antofagasta (LSE: ANTO) and gold miner Randgold Resources (LSE: RRS) also made it to the top three with gains of over 5%.
Software developer Invensys (LSE: ISYS), turbine manufacturer Rolls-Royce (LS: RR) and property company Segro (LSE: SGRO) were the only non-mining stocks to make it to the top ten with gains of over 4%.
Only five FTSE 100 constituents were in the red this morning. Shire Pharmaceuticals (LSE: SHP) and insurer Legal & General (LSE: LGEN) were at the bottom of the pile, shedding 2.4% and 1.9% respectively.
US stock index futures inched up this morning, pointing to a higher start on Wall Street and further strengthening the Footsie.
Commodities
Oil prices stayed on the rise in the morning with November Brent Crude stopping just a few cents short of US$67/barrel, while US light crude for November delivery reached US$71.34/barrel.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) posted identical gains of about 1.8%, responding to the increase in oil prices. Fellow FTSE 100 constituents Tullow Oil (LSE: TLW), Petrofac (LSE: PFC), Cairn Energy (LSE: CNE) and BG Group (LSE: BG) also added more than 1.5%.
In the FTSE 250, Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) rose marginally, while Heritage Oil (LSE: HOIL) outperformed the sector with a 5% gain.
US focused oil and gas company Caza Oil & Gas (AIM: CAZA) soared 48% to emerge as the leading riser among the juniors. Latin America operating Gold Oil (LSE: GOO) and South America and Gulf of Mexico operating Irish gas company Pan Andean Resources (AIM: PRE) both rallied 12%. US focused junior Empyrean Energy (AIM: EME) rose 4%.
Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico, added 3%, as did EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG). Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and energy investor Xtract Energy PLC (AIM: XTR) both climbed 2.8%.
Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP), which reported an oil discovery in the Kurdistan region in northern Iraq today, climbed 5.5%. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) shed 5%, correcting after yesterday’s strong gains. North American focused oil & gas junior, Pantheon Resources (AIM: PANR) lost 4.5%.
Gold and SIlver climb to boost miners
Gold continued its climb, reaching US$1,026/oz. Silver was just 5 cents short of US$17/oz, while Platinum improved to US$1,307/oz.
Gold miners were hot in early trade, boosted by the surging gold price with blue chip Randgold Resources (LSE: RRS) adding 5.4% to emerge as the leading risers among the miners in the FTSE 100. Fellow yellow metal producer from the FTSE 250 Petropavlovsk (LSE: POG) climbed 5.7%.
Platinum miner Lonmin (LSE: LMI) rose 2.8%, as did another FTSE 100 constituent silver miner Fresnillo (LSE: FRES).
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose 2.3%.
Mid cap silver producer Hochschild Mining (LSE: HOC) also did very well in early trade, rising 5%. Fellow FTSE 250 platinum miner Aquarius Platinum (LSE: AQP) added 1.4%.
Copper and gold miner EMED Mining (AIM: EMED) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) were among the top performers among the small caps, with each climbing 5%. Western Australia operating Norseman Gold (AIM: NGL) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) followed, advancing 4% and 3% respectively.
Turkey focused gold miner Ariana Resources (AIM: AAU) and African focused diversified miner Nyota Minerals (AIM: NYO) were in decline, shedding 9% and 6% respectively.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS), whose target price was upped by broker Fox-Davies today, which also retained its “buy” recommendation for the company, slid 2.5%, as did Africa operating gold miner GMA Resources (AIM: GMA).
Copper and Nickel rise
Base metals prices also increased. Copper improved to US$2.72/pound, Nickel rose to US$8.05/pound, while Zinc was just short of US$0.85/pound.
Copper miners Kazakhmys (LSE: KAZ) and Antofagasta (LSE: ANTO) were in the lead, climbing 7% and 5% respectively. Anglo American (LSE: AAL) and Vedanta Resources (LSE: VED) followed with gains of over 4%. Eurasian Natural Resources (LSE: ENRC), Xstrata (LSE: XTA) and Rio Tinto (LSE: RIO) also did well with all advancing over 3%.
The world’s largest miner BHP Billiton (LSE: BLT) wasn’t very volatile with a 2.4% gain.
Shares in London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) were in demand in early trade, helping it to a 5.5% climb.
Indonesia operating coal miner Churchill Mining (AIM: CHL) was one of the leading risers among the juniors with a 7% rally. South American focused Herencia Resources (LSE: HER) and Uranium and copper explorer Kalahari Minerals (AIM: KAH) added almost 4%, while coking and thermal coal producer New World Resources (LSE: NWR) tacked on 3.3%.
Russian focused copper and nickel miner Amur Minerals (AIM: AMC) and copper and nickel explorer Regency Mines (AIM: RGM) went in a different direction, shedding 4% and 3.7% respectively.
