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Kazakhmys, Antofagasta, Xstrata and BHP fall as copper and nickel slide, FTSE 100 inches lower

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Overview: the FTSE 100 was fluctuating around the opening level in late afternoon, trying to salvage its early gains to extend its winning streak to five days. The blue chip index got some help from the US stock market, which turned early losses into gains with the Dow Jones Industrial Average tacking on a further 0.2% on top of yesterday’s gain of over 2%. The broader S&P 500 index was flat, while the technology focused Nasdaq composite was off to a volatile start, edging slightly lower after posting early gains.

Investors had plenty of corporate reports to digest as heavyweights Barclays (LSE: BARC), HSBC (LSE: HSBA), Imperial Tobacco (LSE: IMT), InterContinental Hotels Group (LSE: IHT), Vodafone (LSE: VOD) and Schroders (LSE: SDRC) all updated the market on their performance today.

HSBC (LSE: HSBA) was in the lead with a 4.2% gain on the back of the better than expected Q3 report released today. Fellow banking group Barclays (LSE: BARC) sank to the bottom of the FTSE 100 with a 4.5% decline.

Tobacco giant Imperial Tobacco Group (LSE: IMT), which beat expectations with its full year results, and asset management firm Schroders (LSE: SDRC), whose Q3 results also were ahead of projections, were the other two stocks to make it to the top three with gains of 3% and 2.5% respectively.

Utility company Severn Trent (LSE: SVT), beverage group Diageo (LSE: DGO) and medical devices manufacturer Smith and Nephew (LSE: SN) also made it to the leaderboard with gains of 2%.

Mining stocks were weakened by declines in metal prices, primarily copper and nickel. Precious metals focused Randgold Resources (LSE: RRS) and Fresnillo (LSE: FRES) and copper miners Kazakhmys (LSE: KAZ) and Antofagasta (LSE: ANTO) joined Barclays with losses of over 2.5%.

Hotel operator InterContinental Hotels Group (LSE: IHG), tour company Thomas Cook Group (LSE: TCG) and mobile operator Vodafone (LSE: VOD) also were in selling mode, shedding 2%.

Commodities

Oil prices picked up today as December Brent Crude rose to US$78.35/barrel and US light, sweet crude for December delivery was a few cents short of US$80/barrel.

Most oil and gas stocks turned negative. Tullow Oil (LSE: TLW) managed to hold on to a small gain, as did Shell (LSE: RDSB), while fellow supermajor BP (LSE: BP) posted a marginal loss.

Other FTSE 100 constituents BG Group (LSE: BG) and Cairn Energy (LSE: CNE) lost 1.2% and 1.5% respectively, while Petrofac (LSE: PFC) was at the bottom of the pile with a 2.2% decline.

With the exception of Dragon Oil (LSE: DGO), which was unchanged from the opening level, midcaps also were in decline with Dana Petroleum (LSE: DNX) and Heritage Oil (LSE: HOIL) shedding 1% and 1.5% respectively.

US focused junior Empyrean Energy (AIM: EME) led the sector with a 10% climb after releasing a drilling update from its Riverbend project, where operator Krescent Energy encountered significant gas flares in the Quinn 3H well.

Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) followed with a 6% advance, while North America focused oil & gas junior Pantheon Resources (AIM: PANR) gained 3.5%.

Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) went in a different direction, shedding 4%. North American based explorer Nighthawk Energy (AIM: HAWK) declined 3.5%, while Kazakhstan operating Max Petroleum (LSE: MXP) and Mongolia-focused Petro Matad Ltd (AIM: MATD) retreated 3%.

Gold and silver recover, but miners fall

Precious metals recouped some of their earlier losses, yet mining stocks failed to climb out of the red.

Gold returned above US$1,100/oz, while silver and platinum climbed to US$17.42/oz and US$1,355/oz respectively.

Gold miner Randgold Resources (LSE: RRS) and silver producer Fresnillo (LSE: FRES) both declined 3.4%, while fellow FTSE 100 constituent platinum miner Lonmin (LSE: LMI) shed 2.5%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) performed relatively well, keeping its losses to a minimum.

Midcaps also turned negative. Gold miner Petropavlovsk (LSE: POG) lost 4.5%, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) both tacked on about 1.5%.

Yamana Gold (LSE: YAU) outperformed the market, rising almost 5%.

South American based explorer Mariana Resources (AIM: MARL) led the juniors with a 12% climb after raising £2.6 million for the exploration programme at its Dos Calandrias gold-silver project in Argentina.

Turkey focused gold miner Ariana Resources (AIM: AAU) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) followed, advancing 7% and 6% respectively.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) moved up almost 5%.

Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Africa operating gold miner GMA Resources (AIM: GMA) both lost more than 6%. Tajikistan operating gold miner Kryso Resources (AIM: KYS) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) followed with losses of over 3%.

Copper and nickel tumble

Base metals were in decline today as copper and nickel retreated to US$2.94/lb and US$7.65/lb respectively, while zinc declined to US$0.96/lb.

BHP Billiton (LSE: BLT) and Rio Tinto (LSE: RIO) led the sector with small gains. Vedanta Resources (LSE: VED) also held on, sitting slightly below the opening level in late afternoon.

Copper miners Antofagasta (LSE: ANTO) and BHP Billiton (LSE: BLT) were the leading fallers in the sector, shedding 3% and 2.5% respectively. Anglo American (LSE: AAL) followed with a 2% loss. Xstrata (LSE: XTA) also lost nearly 2%, while BHP Billiton (LSE: BLT) retreated 1%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed with market with a 1% climb.

South Africa operating chrome miner Chromex Mining (AIM: CHX) led the sector with a 20% rally after saying it was continuing to generate positive cash flow and announced the acquisition of additional chrome assets in Zimbabwe.

Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) followed, advancing 11% and 9% respectively.

Cement operator Prosperity Mineral Holdings (AIM: PMHL) and uranium and copper explorer Kalahari Minerals (AIM: KAH) added almost 4%.

Copper and nickel explorer Regency Mines (AIM: RGM) was one of the leading fallers among the juniors, slipping 10%. Specialty minerals exploration and development company Thor Mining (AIM: THR) and iron ore focused investor Red Rock Resources (AIM: RRR) also were in decline, shedding 7% and 4.5% respectively.

Banks, insurance, private equity

HSBC (LSE: HSBA) led the banking sector with a 3.8% climb. Standard Chartered (LSE: STAN) also performed well, posting a small gain.

Barclays (LSE: BARC) was at the bottom of the pile with a 4.5% slide, while part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) declined marginally.

All insurance stocks plunged into the red on Tuesday. Legal & General (LSE: LGEN) emerged as the top faller, shedding almost 2%. Standard Life (LSE: SL) also lost more than 1.5%. Prudential (LSE: PRU) and Aviva (LSE: AV) were down about 1.5%, while RSA Insurance Group (LSE: RSA) lost almost 1%.

Car insurer Admiral Group (LSE: ADM) and Old Mutual (LSE: OML) declined marginally.

Private equity group 3i (LSE: III) posted insignificant losses.

Small Cap Movers

Other notable movers among the small caps included developer of CAD and image analysis software Medicsight (AIM: MDST), which lost almost 7%.

Large and Mid Cap News

UK listed telecommunications firm, Vodafone (LSE: VOD) reported their results for the first half ended 30th September 2009, in which revenues increased by more than 9%. The strong revenue growth was largely driven by the acquisition of Vodacom in South Africa and a significant rise in demand for the company’s emerging data carrying business. Vodafone Chief Exec, VIttorio Colao said that Vodafone expects to reduce costs by a further £2 billion by 2012. The group expects to attain full year adjusted operating profit between £11bn and £11.8bn.

In this morning’s Q3 interim results, gold miner Randgold Resources (LSE: RRS, NYSE: GOLD) reported in-line gold sales, and reiterated that it has four development projects where mining “is on the horizon”.

Base metals focused miner and FTSE 100 constituent Rio Tinto (LSE & ASX: RIO) has awarded its long time IT provider CGI Group (TSX: GIB, NYSE: GIB) with a three year application support services contract to extend a more than 25 year partnership.

Barclays (LSE: BARC), is the latest of the UK’s ‘Big Four’ banking stocks to report their interim results in which current positive operating performances are being offset by increased impairments and charges. Investors appeared to have responded with some disappointment this morning as shares in the banking group have weighed down the FTSE 100, falling more than 2% this morning following the mixed results.

In this morning’s interim statement HSBC (LSE: HSBA) said that profitability for the first nine months of 2009 was stronger than expected with underlying pre-tax profits ahead of the same period last year. HSBC identified its diversified business model and ‘tight cost control’ as influences which ‘continue to deliver broadly based profits’. Investors have welcomed the statement as HSBC shares advanced almost 5% following the news, elsewhere today Barclays shares dropped 2.5% after posting less impressive results.

Food manufacturer Northern Foods (LSE: NFDS) said it was on track to meet its full year guidance as like for like sales increased 2.9% in the first half as its Chilled and Bakery divisions performed strongly.

The Yell Group (LSE: YELL) announced their interim results for the half year ended 30th September 2009 and also proposed a £660 million equity based fund raising.

Materials science company Cookson Group (LSE: CKSN) said it expected its full year profit to be at the upper end of analysts’ forecasts as Q3 revenues increased 9% quarter on quarter at constant exchange rates and improved end-market and trading performance continued into the final quarter of the year.

Small Cap News

London listed Kalahari Minerals (AIM: KAH) stated this morning that it had continued buying shares in Extract Resources (TSX & ASX: EXT).  Kalahari now holds approximately 98 million shares in Extract Resources, up from 97 million shares as of 12 October 2009.  As a percentage, Kalahari’s stake represents 40.43% of Extract Resources equity, down from 40.88% on 12 October 2009, after 5.2 million warrants in the Company were exercised.

Jubilee Platinum PLC (AIM: JLP) said it was notified that, following the acquisition of ordinary shares on November  2 2009, the Prudential PLC (LSE: PRU)  group of companies now holds 33,438,948 ordinary shares and voting rights in Jubilee, representing 14.28 percent of the issued share capital.

Argentina focused gold explorer Patagonia Gold (AIM: PGD) said the current infill drilling programme at its La Manchuria gold-silver project in Argentina continued to intercept bonanza gold and silver grades with a NI43-101 estimate for the project still expected in Q2 2010.

GMA Resources PLC (AIM: GMA) said its Amesmessa gold mine in Algeria produced 1,918 ounces of gold and 379 ounces of silver in October, and a total of a total of 28,645 ounces of gold in the first ten months of 2009 compared with 17,096 ounces in the first ten months of 2008.

Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) has extended its relationship with Centerra Gold (TSX: CG), establishing a joint venture (JV) over its 100% owned Bakir Tepe project in southwestern Turkey.

Investors reacted warmly to an update from South Africa focused chromite produce, Chromex Mining (AIM: CHX)(‘Chromex’), which reported today that it was continuing to generate positive cash flow and announced the acquisition of additional chrome assets in Zimbabwe.

Turkey focused gold miner Ariana Resources (AIM: AAU) has announced the results of trenching programme undertaken on the Salinbas prospect, which returned high grade bedrock intercepts.

South American based explorer Mariana Resources (AIM: MARL) has undertaken a share placement at 13 pence per share to raise a total £2.6 million to fund the exploration programme at its Dos Calandrias gold-silver project in Argentina.

African Medical Investments PLC (AIM: AMEI) has drawn down an initial US$20.25 million after expenses in line with the late October agreement on a US$47 million equity line with an investment fund managed by New York based Harbinger Capital Partners LLC.

Libra Advisors, which acts as investment advisor to Libra Fund and Libra Offshore, announced this morning that it had increased its stake in African focussed soft commodity specialist, Agriterra Limited (AIM: AGTA).  Libra now holds a cumulative 34.722 million shares, or approximately 6.46% of Agriterra.

Lonrho PLC (AIM: LONR) expects to see strong progress in the first quarter of the 2010 financial year after each of its core businesses continued to perform to expectations in the fourth quarter.

US focused junior Empyrean Energy (AIM: EME) said the Quinn 3H well, currently drilled at its Riverbend project, in Texas encountered multiple significant gas flares including multiple flares over 100 feet and one over 200 feet.

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