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Miners, oil and gas and banking stocks surge to boost FTSE 100

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Overview: the FTSE 100 recovered from recent selloffs today, surging 2.3% on a strong performance from miners, energy companies and financial stocks.

Base metal miners flooded the leaderboard with Antofagasta (LON:ANTO), Kazakhmys (LON:KAZ) and Xstrata (LON:XTA) taking the lead among the blue chips with gains of 6-7%. Other notable risers included banking group Barclays (LON:BARC), which added 6% and engineering company Invensys (LON:ISYS).

African Barrick Gold (LON:ABG) declined 1.7% to become the only blue chip to shed more than 1% today. Water company Severn Trent (LON:SVT) posted a marginal loss.

US stocks rallied in early trade. The Dow Jones Industrial Average climbed 1.4%, while the broader S&P 500 index surged 1.5% and the technology heavy NASDAQ composite jumped 1.7%.

Commodities

Oil prices followed the usual pattern today, moving alongside equity markets, which were headed north after the Reserve Bank of Australia commented that growth in Latin America and Asia was strong to ease worries over the possibility of a double dip recession that has kept the markets under pressure over the recent weeks.

The Reserve Bank left the interest rate unchanged at 4.5%, also stating that the economic growth in the US and Europe was slowing.

August Brent Crude rose to US$72.57/barrel, while US light, sweet crude for August delivery improved to US$73.10/barrel.

Blue chip oil and gas producers were on the rise today. Tullow Oil (LON:TLW) and Cairn Energy (LON:CNE) led the way, advancing 3.6% and 3.2% respectively. BG Group (LON:BG) followed, tacking on nearly 2%. Supermajors BP (LON:BP) and Shell (LON:RDSB) added 2.5% and 1.3%.

Oil and gas engineering firms Amec (LON:AMEC) and Petrofac (LON:PFC) gained 2% and 2.5% respectively.

Midcaps followed with the exception of Salamander Energy (LON:SMDR), which declined 1%. Dana Petroleum (LON:DNX) also failed to advance, staying at the opening level.

Heritage Oil (LON:HOIL) took the lead with a 6% gain. Dragon Oil (LON:DGO) climbed 3.1% and JKX Oil & Gas (LON:JKX) added 2%. Premier Oil (LON:PMO) lagged behind with a marginal gain.

Service companies headed in different directions as while wood Group surged 4.4%, Wellstream Holdings (LON:WSM) posted a small decline.

North American based explorer Nighthawk Energy (LON:HAWK) led the juniors, surging 14%. EU operating Rome-based oil junior Mediterranean Oil & Gas (LON:MOG) also did well, rallying 11%. Mongolia-focused Petro Matad Ltd (LON:MATD) followed with a 7% gain.

Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LON:GOO) and energy investor Xtract Energy PLC (LON:XTR) were in the red with losses of 7% and 6% respectively.

Gold steady at $1,210, silver and platinum rise

Gold prices stayed at roughly the same level today, inching up to reach US$1,210/oz after balancing above US$1,205/oz for most of the day on Monday. The yellow metal was unresponsive to movements in equity markets today, which rallied with the FTSE 100 surging 2.3% and futures for the Dow Jones index in the US rising 1.1%.

The markets were in selling mode for two weeks, which saw the Dow Jones Industrial Average and the FTSE 100 slip below key levels of 10,000 and 5,000 respectively. Gold, which is now seen as a safe haven asset, normally moving inversely to the markets, also retreated, sliding below US$1,200/oz not long after nearly reaching US$1,300/oz.

Other precious metals advanced today with silver and platinum reaching US$17.85/oz and US$1,521/oz respectively.

Major mining stocks recovered form yesterday’s fall. Silver miner Fresnillo (LON:FRES) led the sector in the FTSE 100 with a 5% advance. Platinum miner Lonmin (LON:LMI) gained 4.1% and Randgold Resources (LON:RRS) advanced 2.3%.

Specialty chemicals firm Johnson Matthey (LON:JMAT) rose 2.1%.

Midcaps did better with Aquarius Platinum (LON:AQP) and gold miner Petropavlovsk (LON:POG) rising 5%, while silver producer Hochschild Mining (LON:HOC) tacked on 2.1%.

Small cap miners showed little movement today. Turkey and Saudi Arabia operating gold explorer KEFI Minerals (LON:KEFI) was the top performer in the sector, soaring 30%. Uzbekistan focused gold miner Oxus Gold (LON:OXS) and African focused nickel and gold exploration and development junior Nyota Minerals (LON:NYO, ASX:NYO) advanced 5% and 4% respectively.

Copper and nickel rise to boost miners

Base metals followed the general trend in the markets. Copper and nickel advanced to US$2.98/lb and US$8.59/lb, while zinc rose to US$0.82/lb.

Base metal miners were in demand today. Antofagasta (LON:ANTO) surged 6.5% to take the lead in the sector. Kazakhmys (LON:KAZ) and Xstrata (LON:XTA) moved up 6% and 5.5%. Eurasian Natural Resources (LON:ENRC), Rio Tinto (LON:RIO) and Vedanta Resources (LON:VED) all added slightly more than 5%. BHP Billiton (LON:BLT) and Anglo American (LON:AAL) advanced 4.5% and 4% respectively.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LON:FXPO) moved with the sector, tacking on nearly 5%.

Cement operator Prosperity Mineral Holdings (LON:PMHL) and laterite nickel specialist European Nickel (LON:ENK) led the juniors, advancing 8.5% and 6% respectively. Tantalum concentrate supplier with assets in Mozambique Noventa (LON:NVTA) added 4.5% after signing a new offtake agreement for tantalum from its flagship Marropino mine.

Banks, insurance, private equity

Barclays (LON:BARC) and Royal Bank of Scotland (LON:RBS) led the banking sector with gains of 5.7% and 4.7% respectively. Standard Chartered (LON:STAN) and Lloyds (LON:LLOY) also did well, rising 3.7% and 3.2%. HSBC (LON:HSBA) tacked on nearly 3%.

Insurers also did well today. Aviva (LON:AV) and Legal & General (LON:LGEN) were ahead with gains of 4%. Old Mutual (LON:OML) added 3.7%, while Prudential (LON:PRU) and Standard Life (LON:SL) tacked on about 2.5%. Admiral Group (LON:ADM) and RSA Insurance Group (LON:RSA) advanced 1.6% and 1.3% respectively.

Private equity group 3i (LON:III) rose 1.5%.

Small Cap Movers

Other notable movers among the small caps included environmental science and technology company Accsys Technologies (LON:AXS) with a 10% rally and Africa focused investor Lonrho (LON:LONR), which added 5%. Mobile email and data synchronisation group Synchronica PLC (LON:SYNC) was one of the top performers among the small caps today, surging 20%.

Small Cap News

Italy–resource focused Po Valley Energy (ASX:PVE) has reported output topping 10 million cubic metres of gas at its Castello field in northern Italy for the period from production start to 30 June 2010.

Biocompatibles International (LON:BII) has acquired certain patents, protecting its bead products, in a US$4.5m deal with Biocure Inc. The patents - over DC Bead, LC Bead and Bead Block – have been licensed from Biocure since 2002, with Biocompatible paying a 5% royalty from sales until 2011.

In an update ahead of its first half results, Alliance Pharma (LON:APH) told investors it continues to benefit from strong trading with year-on-year revenues up 40%, excluding revenues from recently acquired products. Overall, in the six-months ended 30 June 2010, the company generated revenues of approximately £23.4m, up more than £10m from the first half of 2009.

Tantalum concentrate supplier with assets in Mozambique Noventa (LON:NVTA) has signed a new offtake agreement for tantalum concentrate from its flagship Marropino mine for similar quantities as in its existing deal with a pricing that “reflects current market prices".

In an update on its operations in Turkey, Xtract Energy (LON:XTR) said that its 50%-owned subsidiary Extrem Energy will install a mechanical bridge plug and a down-hole pump into the Sarikiz-2 well, in an attempt to re-establish production and increase production rates.

In a pre-close statement, PartyGaming (LON:PRTY) said it is trading in-line with its own expectations, despite the adverse impact of the World Cup - as poker players leave their virtual tables in favour of the football. The online gaming specialist reported a 28% increase in year-on-year revenue in Q2, although this represents a 2% decline on the first quarter.

Edison Investment Research has issued a note on Nighthawk Energy (LON:HAWK, OTC:NHEGY), saying the North American based explorer was entering a “very interesting stage” that would see the crystallization of “substantial value” relating to its flagship Jolly Ranch project that is currently for sale.

In a note on Cinpart (LON:CINP), Edison Investment Research said that Active Energy’s - the company’s 72.2%-owned voltage optimisation business - decision to establish an assembly facility in Ohio should enhance its drive into the US voltage optimisation market.

BioNeutral Group Inc (OTCBB:BONU)  a specialty chemical technology-based life science company, said it has completed an agreement with Keystone Research and Pharmaceuticals (KRP) for its proprietary formulations for use in the veterinary, dental and cosmetic markets.

In its financial results, Prosperity Minerals (LON:PMHL) reported a 31% increase in revenue to US$849m (FY09: $647.7m) and a 140% rise in pre-tax profit to US$18.5m (FY09: US$7.7m). The newly re-focused iron-ore trading business had a particularly significant year, in which it re-positioned itself following the disposal of the majority of its Chinese cement business.

Large and Mid Cap News

Infrastructure software developer Autonomy Corp (LON:AU) has signed an OEM (original equipment manufacturer) license agreement with IBM (NYSE:IBM) to add to its large customer base that features names like AOL, BBC, SEC (Security and Exchange Commission), FedEx, Ford, NASA, US Department of Homeland Security and Department of Energy and Coca-Cola.

Construction group Balfour Beatty (LON:BBY) said trading performance had been consistent with expectations for the year as markets remained robust despite uncertainties dealing with government funding of infrastructure investment. It expects the order book at the end of the first half of June26 to surpass the £14.1 billion reported for the end of December 2009.

In an trading statement for the first half, Tullow Oil (LON:TLW) said it expects to produce between 56,000 and 57,000 barrels of oil equivalent per day (boepd) through FY2010. In H2, the company expects the Jubilee Phase 1 development in Ghana to produce first oil, and a high-impact drilling programme is scheduled - with key wells in Ghana and Uganda already underway.

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