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BG Group stays hot, but Shell and BP slide, FTSE 100 back to 5,000 as oil and metals rise

Published: 01:58 12 Sep 2009 AEST

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Overview: the FTSE 100 climbed back over 5,000 on Friday, which was rather slow in terms of news and updates. The index was bolstered by yesterday’s strong trading session on Wall Street as the Dow Jones industrial average climbed over 80 points yesterday and opened higher today.

Miners did well as metals continued gaining after correcting earlier in the week, and gold got back to US$1,000. Base metals also rose after recent declines, while oil prices held steady.

Hedge fund manager Man Group (LSE: EMG) managed to outperform the strong mining stocks, going to the top of the leaderboard with a 10.5% gain. Blue chip silver producer Fresnillo (LSE: FRES) followed, advancing 6%. The world’s fourth largest copper producer Xstrata (LSE: XTA) climbed 3.7%.

Electricity generator International Power (LSE: IPR) also did well, rising 3.6%.

BG Group (LSE: BG) still appeared to be in buying mode, climbing 3.6% to 1,144p per share.

Home Retail Group (LSE: HOME) again disappointed, emerging as the leading faller in the blue chip index for the second day in a row with a 4.5% slide. Clothing company Burberry (LSE: BRBY) declined 1.8%, while telecommunications company joined in with a 1.7% loss.

Commodities

Oil prices inched higher today. US light crude reached US$72/barrel, while Brent Crude was at US$69.9/barrel, roughly the same level as yesterday.

Oil and gas sector was mixed.

BG Group was still leading the way, tacking on a further 3.7% to reach 1,145p per share. Fellow FTSE 100 constituent Cairn Energy (LSE: CNE) added 2.8%.

Supermajors BP (LSE: BP) and Shell (LSE: RDSB) both declined marginally, as did Petrofac (LSE: PFC). Tullow Oil (LSE: TLW) opened with gains, but ended up below the opening level.

Heritage Oil (LSE: HOIL) rose despite starting in the negative, while fellow mid cap Dana Petroleum (LSE: DNX) turned negative after making small gains in the morning. Dragon Oil (LSE: DGO) also finished in the red after its early gains got wiped out.

Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) was the leading risers among the juniors with a 14% rally. Gulfsands Petroleum (AIM: GPX), finished with a 6% gain after rising over 11% in early trade, while energy investment company Xtract Energy (AIM: XTR) rose 6.3%.

Europe focused oil and gas developer Ascent Resources (AIM: AST) and US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) lost over 5%, while Latin America and US operating oil producer Pan Andean Resources (AIM: PRE) shed over 4%.

Precious metals strong on higher prices

Gold climbed to US$1,010/oz. Silver added 22 cents, rising to US$16.89/oz, while Platinum also made progress, advancing to US$1,312/oz.

Mining stocks were among the leading gainers in the market today.

Silver producer Fresnillo (LSE: FRES) led with a 5.7% climb. Mid tier platinum miner Aquarius Platinum (LSE: AQP) followed, rising 5.3%. FTSE 100 constituent Lonmin (LSE: LMI) also did well, adding 3.3%.

Gold miners Randgold Resources (LSE: RRS) and mid tier Peter Hambro Mining (LSE: POG) both rose over 2.5%. Yamana Gold (LSE: YAU) rose 3.5%.

FTSE 250 silver producer Hochschild Mining (LSE: HOC) was at the bottom of the pile with a decline of less tan 1%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) closed with marginal declines.

Juniors were mixed.

Platmin Ltd (TSX, AIM: PPN) surged 15%, as did South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI).

South Africa operating miner Braemore Resources (AIM: BRR) also traded well, adding 8.6%.

Philippines focused gold producer Medusa Mining (AIM&ASX: MML) and African focused gold deposit developer Cluff Gold (AIM: CLF) rose 5%.  Uzbekistan focused gold miner Oxus Gold (AIM: OXS) followed with a 4% climb.

Base metal miners climb as copper, nickel rise

Base metals prices were up today. Copper moved up to US$2.86/pound, Nickel improved to US$7.90/pound and Zinc was sitting at US$0.86/pound.

Major base metals miners fell into the same pattern.

Rio Tinto (LSE: RIO) and BHP Billiton (LSE: BLT) both added 3.4%. Vedanta Resources (LSE: VED), Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL) were up 2.5%. Copper miner Antofagasta (LSE: ANTO) climbed less than 1%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was mostly unchanged.

Juniors were mixed.

Nickel laterite play Rusina Mining (AIM: RMLA) led the pack with an 18% rally on vague speculation of a possible tie-up with European Nickel (AIM: ENK).

South Africa operating chrome miner Chromex Mining (AIM: CHX) and mineral sands producer Kenmare Resources (LSE: KMR) also climbed, advancing about 10%.

Tunisia focused miner Maghreb Minerals (AIM: MMS) and South American focused junior Herencia Resources (AIM: HER) were at the bottom, sliding 10% and 9%.

Tantalum junior with assets in Mozambique Noventa (AIM: NVTA) also declined, shedding about 6.7%. Copper and nickel explorer Regency Mines (AIM: RGM) dropped almost 5%.

Banks, insurance, private equity

Financial stocks mostly gained on Friday.

Barclays (LSE: BARC) led major banking groups, rising 1.2%.

Partly nationalised groups Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were up 1% and 0.5% respectively. HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) rose marginally.

Insurers also were in buying mode, except Standard Life (LSE: SL) and Friends Provident (LSE: FP), which both shed over 1%.

Legal & General (LSE: LGEN) and Aviva (LSE: AV) rose 2.5% and 2% respectively. Prudential (LSE: PRU) added 1.2%, while RSA Insurance (LSE: RSA) rose marginally.

Private Equity group 3i (LSE: III) climbed 1.5%.

Large and Mid Cap News

Tesco PLC (LSE: TSCO) said it has concluded talks with the UK arm of Fortis Holding, controlled by BNP Paribas, to form a new partnership providing motor and household insurance.

Balfour Beatty PLC (LSE: BBY) said its 50 percent controlled Hong Kong infrastructure contractor Gammon Construction has been awarded the Centennial Campus contract by the University of Hong Kong, valued at £150 million.

London-headquartered diversified mining group Vedanta Resources (LSE: VED) said today its subsidiary Sterlite Industries is upping its offer for bankrupt American copper miner Asarco after a US bankruptcy court recommended rival Groupo Mexico’s bid earlier this month.

International staffing business and FTSE 250 constituent SThree (LSE: STHR) released a trading update today today, reporting further declines in profits and revenues in the third quarter, but said its UK business continued stabilising and month to month performance improved.

Shares in 888 Holdings PLC (LSE: 888) were lifted by news today that its B2B division Dragonfish will provide online gaming services to Harrah's Interactive Entertainment Inc (HIE), a subsidiary of Las Vegas-based casino group Harrah's Entertainment Inc.

Small Cap News

E1 Entertainment (AIM:ETO) announced their line up for the Toronto Film Festival today, the licensing and distribution focused entertainment company is set to have a high profile presence at the annual film festival.

Property investment and development company Quintain Estates (LSE: QED) said today it had sold about 9% of its stake in healthcare fund Quercus Healthcare Property Partnership at a 12% discount to proceed with its cash repatriation campaign.

N Brown Group PLC (LSE: BWNG) said it bought the brand, website, stock and the assets of 14 stores of tall and large menswear chain High & Mighty Ltd from administrators PricewaterhouseCoopers for a total cash cost of £1.6 million.

Australian gold producer Norseman Gold PLC (AIM: NGL; ASX: NGX) said funds of Sprott Asset Management LP acquired further shares in the company. Sprott now controls 19,879,811 shares, having raised its stake to 11.6 percent from 10.5 percent.

UK Pubs group JD Wetherspoon PLC (LSE: JDW) reported solid full-year results and told Reuters it is considering options for a refinancing, including a rights issue.

Allied Gold (AIM: AGLD & ASX: ALD) announced encouraging assays at the Pigiput & Pigibo gold prospects which are a central part of the ML136 mining lease, which forms part of the Tabar Island Gold Project, Simberi Island.   Allied Gold own 100% of the ML136 mining lease.

Intelek PLC (AIM: ITK) reiterated that it expects a resilient performance for the full-year but various contract wins and opportunities currently being addressed have given the group more confidence in an improved trading performance in the second half of the year.

FinnCap retained its bullish stance on Thorntons (LSE: THT) two days after the chocolatier released its full year results, which the broker said surpassed expectations, while the prospects “looked brighter”.

RTC Group Plc (AIM: RTC) fell 17% this morning following disappointing interim results for the first half of the current financial year.  RTC provides recruitment, training and conference services.

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