PR: Oil, gold, silver, copper and nickel rise to boost miners and oil
Overview: the FTSE 100 rallied 1.8% today to reach 5,250 after the first corporate results that came out in the US yesterday beat expectations, while British oil and gas supermajor BP (LON:BP) moved closer to stopping the disastrous oil spill in the Gulf of Mexico, which has heavily impacted its share price.
Tour operator TUI Travel (LON:TT) emerged atop the leaderboard with a 4.4% gain. Quality and safety services company Intertek (LON:ITRK) and temporary power provider Aggreko (LON:AGK) followed, takcing on nearly 4%. Other notable risers included Home Retail Group (LON:HOME) and plumbing and heating equipment manufacturer Wolseley (LON:WOS), which added just over 3%.
Essar Energy (LON:ESSR) and broadcaster BSkyB (LON:BSY) were the only blue chips to turn negative today, posting losses of less than 1%.
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US stocks rallied in early trade. The Dow Jones Industrial Average surged 1.4%, the broader S&P 500 index and the technology heavy NASDAQ composite advanced 1.3%.
Oil prices turned early losses into gains today as markets in Europe and stock index futures in the US rallied after America’s largest aluminium producer Alcoa (NYSE:AA) posted better than expected Q2 earnings and revenues to kick off the corporate reporting season.
Freight transportation company CSX Corp (NYSE:CSX) followed Alcoa, beating analyst expectations with its quarterly results to inspire yet more optimism among investors.
The prices got more support form the International Energy Agency, which projected global oil consumption to increase by 1.6% to 87.8 million barrels a day in its first estimate for 2011. This forecast was based on the International Monetary Fund’s (IMF) projecting of a 4.3% economic growth and an oil price of US$79.40/barrel.
August Brent Crude improved to US$75.65/barrel, while US light, sweet crude for August delivery climbed to US$75.34/barrel.
Blue chip oil and gas producers were on the rise today. BP (LON:BP) advanced 3.6% after installing a new cap on the leaking well in the Gulf of Mexico. Fellow supermajor Shell (LON:RDSB) added 1.45%. BG Group (LON:BG) and Tullow Oil (LON:TLW) climbed 1% and Cairn Energy (LON:CNE) moved up 3.3%.
Oil and gas engineering firms Amec (LON:AMEC) and Petrofac (LON:PFC) tacked on 1.3% and 3.2% respectively.
Heritage Oil (LON:HOIL) and Soco International (LON:SIA) led the midcaps with gains of 2.4%. Salamander Energy (LON:SMDR) advanced 1.25%. Premier Oil (LON:PMO) added 1%, while Dragon Oil (LON:DGO) and Melrose Resources (LON:MRS) posted marginal gains.
Dana Petroleum (LON:DNX) was flat.
JKX Oil & Gas (LON:JKX) was at the bottom of the pile with a loss of nearly 3%.
Wellstream Holdings (LON:WSM) was sitting just below the opening level, while fellow services company Wood Group (LON:WG) climbed 1.8%.
Mongolia-focused Petro Matad Ltd (LON:MATD) led the sector today, soaring 49% after discovering oil in its Davsan Tolgoi-1 well. Europe focused oil and gas developer Ascent Resources (LON:AST) and Iraq operating Irish oil company Petrel Resources (LON:PET) advanced 10% and 6% respectively.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (LON:VOG) declined 5%.
Gold reaches $1,210
Gold rallied today, getting well above US$1,200/oz as bargain hunters were once again taking advantage of the low prices, while safe haven buying returned after Moody’s cut Portugal’s bond rating by two notches.
Gold improved to US$1,210/oz, while silver and platinum advanced to US$18.15/oz and US$1,529/oz respectively.
Major mining stocks were in demand today. Randgold Resources (LON:RRS) rose 2%, while silver miner Fresnillo (LON:FRES) and platinum miner Lonmin (LON:LMI) added 1.8%.
Specialty chemicals firm Johnson Matthey (LON:JMAT) rallied 3.4%.
Aquarius Platinum (LON:AQP) led the midcaps with a 3.4% gain. Gold miner Petropavlovsk (LON:POG) and silver producer Hochschild Mining (LON:HOC) moved up 1.8% and 1.6% respectively.
Africa operating gold miner GMA Resources (LON:GMA) and UK-registered Australasia focused copper and gold miner Central China Goldfields (LON:GGG) led the small caps, surging 8% and 7% respectively.
Turkey focused gold miner Ariana Resources (LON:AAU) headed in the opposite direction with a 9% loss.
Copper and nickel rise to lift miners
Copper and nickel improved today, rising to US$3/lb and US$8.73/lb respectively, while zinc held steady at US$0.82/lb.
Base metal miners did well today. Antofagasta (LON:ANTO) and Eurasian Natural Resources (LON:ENRC) led the sector with gains of 3.5%. Xstrata (LON:XTA) followed with a 3% advance. Anglo American (LON:AAL) and Kazakhmys (LON:KAZ) tacked on 2.7%, while Vedanta Resources (LON:VED) added 2.4%, BHP Billiton (LON:BLT) rose 1.9% and Rio Tinto (LON:RIO) gained 1.6%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LON:FXPO) moved with the sector, climbing 1%.
Specialty minerals exploration and development company Thor Mining (LON:THR) led the sector with a 28.5% rally. London Mining (LON:LOND) climbed 5%. Russia focused copper and nickel miner Amur Minerals (LON:AMC) slipped 9%.
Banks, insurance, private equity
Barclays (LON:BARC) advanced 3.4% to take the lead in the banking sector. Royal Bank of Scotland (LON:RBS) climbed 2.8%, while HSBC (LON:HSBA), Lloyds (LON:LLOY) and Standard Chartered (LON:STAN) gained nearly 2%.
Aviva (LON:AV) and Legal & General (LON:LGEN) were the top performing insurers with gains of 2.3% and 2.1% respectively. Standard Life (LON:SL) climbed 1.8%, while Old Mutual (LON:OML) and RSA Insurance Group (LON:RSA) added about 1.5%. Admiral Group (LON:ADM) and Prudential (LON:PRU) added less than 1%.
Private equity group 3i (LON:III) advanced 2%.
Small Cap Movers
Other notable movers among the small caps included African focused soft commodity specialist, Agriterra Limited (LON:AGTA) with a 16% rally, environmental science and technology company Accsys Technologies (LON:AXS) and offshore marine renewables development company SeaEnergy (LON:SEA) with gains of 6% and computer vision company Seeing Machines (LON:SEE), which added 8%.
Small Cap News
Minera IRL (TSX:IRL, LON:MIRL, BVL:MIRL) is set to expand its exploration footprint in Peru, announcing an option agreement to buy the 3,317ha Killincho gold project from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM).
African Eagle Resources (LON:AFE) said managing director Mark Parker has purchased 263,443 shares at 3.75 pence each to increase his stake in the company to 1.45%.
Seeing Machines (LON:SEE) has reported another new contract at its growing API licensing business, with the signing of a new production license for its tracking software, to be used in Pillar Vision’s latest basketball training aid, Noah Select.
Nomura Code reckons Silence Therapeutics (LON:SLN) is trading at a discount of more than 90 per cent to the value of its nearest competitor as investors fret about its ability to land new collaboration deals.
Zimbabwe-focused investor LonZim (LON:LZM) said that its 51%-owned mobile telecoms’ business ForgetMeNot Africa (FMNA) has landed a deal with Zimbabwe’s largest telecoms operator, ECONET Wireless, to provide a ‘pay-as-you-go’ two-way mobile email and online chat to its customers.
Petro Matad (LON:MATD) has encountered oil shows through the drilling of the Davsan Tolgoi-1 (DT-1) exploration well which is expected to reach total depth within the next week to ten days. The well is the first to be drilled as part of the 2010 drilling programme on Block XX in Eastern Mongolia.
In its full-year results statement, Yangtze China Investment (LON:YCI) said it has not been immune to the current adverse conditions in the global economy, and it has adopted a cash-holding strategy while it “cautiously screens” suitable investment opportunities.
Edison Investment Research has issued a note on Ariana Resources (AIM: AAU), a day after the Turkey focused gold miner reported the finalisation of its 50/50 JV (joint venture) Zenit with Proccea Construction Co over the Red Rabbit gold project in Turkey.
Cinpart’s (LON:CINP) 72.2%-owned voltage optimisation business Active Energy has secured orders worth £375,000 through its existing framework contract with a local government purchasing consortium, signed in September 2009. Under the latest orders, the subsidiary will supply its VoltageMaster product to five prisons across the UK.
Leni Gas & Oil (LON:LGO) has extended its acreage in the shallow offshore US Gulf Coast, through the exercise completion of two new developments from Byron Energy. LGO has acquired a 20% direct working interest, which equates to 16.25% of net revenue, in the Ship Shoal 180 and South Marsh Island 6 blocks.
African Minerals (LON:AMI), the exploration and development company run by mining entrepreneur Frank Timis, has announced it is receiving US$1.5bn investment from the Chinese.
Large and Mid Cap News
Engineering and project management company AMEC PLC (LON:AMEC) announced the award of a five-year Master Services Agreement by BP’s (LON:BP) Azerbaijan business to the AMEC Tekfen Azfen (ATA) consortium.
In its first quarter, luxury goods specialist the Burberry Group (LON:BRBY) increased its underlying total revenues by 24% from a year earlier, driven by sales from its outerwear and non-apparel lines. The top designer brand said it has started the year strongly, and it has confidence to increase its investment in its operations.
British Sky Broadcasting (LON: BSY) and Virgin Media (NASDAQ, LON:VMED) said in a joint statement that Sky has completed the acquisition of Virgin Media Television (VMtv) following regulatory approval in the Republic of Ireland.
Provider of computer services and FTSE 250 constituent Computacenter (LON:CCC) published a bullish pre-close trading update, stating its H1 profitability would be in excess of 10% ahead of the equivalent period of the previous year, while revenue growth would reach 5%.
Pork focused food producer and FTSE 250 constituent Cranswick (LON:CWK) reported an encouraging start to the new financial year as the business performed in line with expectations with sales in the first quarter to end-March 2010 jumping 19% from a year earlier to £198 million.
Shares in oil and gas supermajor BP (LON:BP) soared 9.5% on Monday on takeover speculation and reported negotiations to sell its Alaskan assets to US based energy giant Apache Corp (NYSE:APA) and added a further 2.5% today on news it completed the installation of the new sealing cap on its leaking Macondo well in the Gulf of Mexico.
