Overview: the FTSE 100 was projected to open up to 1% higher this morning after American chipmaker Intel (NYSE: INTC) released better than expected results yesterday, prompting a recovery in the stock markets after yesterday’s slide on the back of a disappointing Q3 report from healthcare products manufacturer Johnson & Johnson (NYSE: JNJ). The UK blue chip index outpaced projections by rallying 1.7% after the UK jobless update released early in the morning showed a unemployment rate of 7.9% in the three months to August, which was below the expected 8% and only slightly higher than 7.6% in the three months to May.
The leaderboard was stacked with mining companies, which were rallying on higher metals prices as gold, silver, platinum and copper all rose. Base metals focused Xstrata (LSE: XTA), Rio Tinto (LSE: RIO) and Kazakhmys (LSE: KAZ) led the way with gains of over 5%. Fashion house Burberry (LSE: BRBY) and bailed out bank Lloyds (LSE: LLOY) also made their way to the top, adding more than 4%.
Beverage group Diageo (LSE: DGE), whose quarterly sales fell 6%, was the leading faller in the blue chip index with a 3%. Power generation company International Power (LSE: IPR) shed 2.5% after selling its stake in the Hartwell plant to Oglethorpe for US$148.5 million.
Commercial property company British Land (LSE: BLND) and retailer Tesco (LSE: TSCO), which went ex-dividend today, declined over 1%.
Commodities
Oil prices rose with November Brent Crude breaking through US$73/barrel, while US light, sweet crude for November delivery reached US$75/barrel.
Major oil and gas stocks were on the rise this morning, responding to the increase in oil prices.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) both added more than 1.5%, as did fellow FTSE 100 constituents Tullow Oil (LSE: TLW) and Petrofac (LSE: PFC). Another blue chip BG Group (LSE: BG) tacked on 2.5%.
Cairn Energy (LSE: CNE) led the FTSE 100 with a gain of almost 3%.
Midcaps also did well. Dragon Oil (LSE: DGO) outperformed the sector, climbing 3.2%. Dana Petroleum (LSE: DNX) followed with a 2.7% advance, while Heritage Oil (OLSE: HOIL) posted marginal gains in early trade.
Juniors didn’t show much movement in the morning. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) was in the lead with a 5% gain, while North American based explorer Nighthawk Energy (AIM: HAWK) added 3.5%.
Kazakhstan operating Max Petroleum (LSE: MXP) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) headed in a different directi8on, shedding over 4%.
Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) lost almost 3%.
Precious metals
Gold retreated after hitting US$1,070, settling at US$1,064/oz. Silver eased below US$18, sliding to US$17.90/oz, while Platinum fluctuated around US$1360/oz.
Major mining stocks also switched to buying mode this morning. Platinum miner Lonmin (LSE: LMI) and specialty chemicals firm Johnson Matthey (LSE: JMAT) were in the lead, climbing more than 3%. Gold producer Randgold Resources (LSE: RRS) added 2.7%, while silver miner Fresnillo (LSE: FRES), which said it was on track to reach full year production target today, rose 2.3%.
In the FTSE 250, gold miner Petropavlovsk (LSE: POG) rose 4.3%, while silver producer Hochschild Mining (LSE: HOC) added 3%, as did Aquarius Platinum (LSE: AQP).
Australian gold and copper prospector Solomon Gold (AIM: SOLG) led the sector with a 17% hike. Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Uzbekistan focused gold miner Oxus Gold (AIM: OXS) followed, climbing 5% and 4% respectively.
Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) added 3.7%.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) went against the tide, sliding 4%.
Base metals
Copper rebounded form yesterday’s losses, improving to US$2.83/pound, while Nickel stood at US$8.29/pound. Zinc moved below US$0.93/pound.
Copper miner Kazakhmys (LSE: KAZ), Xstrata (LSE: XTA) and Rio Tinto (LSE: RIO) were ahead with gains of over 5%. Anglo American (LSE: AAL) climbed 4.5%, while the world’s largest miner BHP Billiton (LSE: BLT) added almost 4%.
Indian miner Vedanta Resources (LSE: VED) advanced 3.6%, while Eurasian Natural resources (LSE: ENRC) rose 2.8%.
Antofagasta (LSE: ANTO) climbed 2.5%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) went against the tide, declining marginally.
Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA), which has raised £2.12 million through a placing, was the leading riser in the sector with a 21% surge.
Philippines focused nickel and copper miner Metals Exploration (AIM: MTL) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) both added more than 2%.
South American focused junior miner Herencia Resources (AIM: HER) took a different path, slipping 4%.
Banks, insurance, private equity
All financial stocks were on the rise today.
Partly nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were in the lead with gains of over 4%. Barclays (LSE: BARC) recovered from yesterday’s losses on the back of the downgrade of Goldman Sachs, adding almost 3%. HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) rose 2% and 1% respectively.
Insurers were off to a slower start. Legal & General (LSE: LGEN) and Old Mutual (LSE: OML) added 2%, while Friends Provident (LSE: FP) climbed1.3%, as did Prudential (LSE: PRU).
RSA Insurance Group (LSE: RSA), Standard Life (LSE: SL) and Aviva (LSE: AV) both rose marginally.
Private equity group 3i (LSE: III) rose 2%.
Small Cap Movers
Other notable movers among the small caps included Zimbabwe-focused investment company LonZim (AIM: LZM), which rallied 12%, while Another African-focused investor Lonrho (AIM: LORN) added 6%. Latin America operating power producer Rurelec (AIM: RUR) climbed 5%.
Large and Mid Cap News
Mexico’s largest silver miner Fresnillo (LSE: FRES) reported a new company record level of silver production in the quarter. Today’s quarterly production report revealed that Central American operating precious metals miner silver produced to 9.7m ounces, which represents a 9.3% increase from Q3 2008.
Dana Petroleum (LSE: DNX) announced it has made an Oil & Gas discovery at the Tornado prospect, offshore West of Shetland, UK. The thickness and quality of the reservoir is in line with pre-drill prognosis.
Services, maintenance and building group and FTSE 250 constituent Interserve (AIM: IRV) has secured two deals from Sandwell College and Ducab HV worth a total £117 million.
BAE Systems (LSE: BA.) issued its Interim Management Statement for the third quarter, stating that trading has been consistent with management's expectations. BAE continues to anticipate a year of ‘good growth’ for 2009 as a whole despite a lower volume of land vehicle sales than in 2008.
Dragon Oil PLC (LSE: DGO) said the Dzheitune (Lam) 28/137 and 13/138 wells in the Kaspian Sea offshore Turkmenistan have been completed and successfully tested, in line with the schedule.
International luxury company and Designer clothing brand the Burberry Group plc (LSE: BRBY) released an update on its trading performance for the first half. Across the Group total sales in the first half declined by 5%, Retail sales increased by 14%, while wholesale revenue declined by 23%.
Small Cap News
Shares in Meridian Petroleum PLC (AIM: MRP) were lifted by news that the work programme at the East Lake Verret gas and oil field in Lousiana, US, was successfully completed, and that all wells are now back on-stream ahead of schedule.
Broker Fox-Davies Capital (FD Capital) reiterated its bullish stance on Lydian International (TSX: LYD) after the Armenia operating gold miner released the results from its step-out drilling programme at the Amulsar gold discovery in Armenia, which it said was a success as new gold and additional areas for exploratory and infill drilling were identified, extending the initial inferred resource of 1 million ounces.
Noventa Ltd (AIM: NVTA), the tantalum junior with assets in Mozambique, said it raised a total of £2.12 million through the placing and open offer of 53.059 million new ordinary shares. The news propelled the stock to rise more than 21 percent in early London trade.