Resources stocks lead the FTSE 100 higher in early trade Monday in despite mixed economic trade figures from China. The London blue-chip index rises roughly 0.4% to 6,590 having closed 6,567.24 in Friday's session, its highest finish since 6 October.
Mining stocks head the Footsie leader board, with the sector giants lead higher by Fresnillo's (FRES) 2.7% gain to 753.5p. Anglo American (AAL), Antofagasta (ANTO) and Randgold Resources (RRS) are also on the up.
But gains are capped for the wider market following profit warning and proposed rights issue at Serco (SRP). The government contractor sees its shares plunge 32% to 216p as it downgrades profit forecasts, flags a £1.5 billion impairment on contracts and announces a rights issue of up to £550 million in the first quarter of 2015. The rights issue is needed because falling profit is likely to mean the business comes close to breaching covenants on its bank loans, according to analysts at Investec.
Better news among the mid caps comes at oil explorer Cairn Energy (CNE), which shoots up 8.6% to 171.4p, as it makes a second oil discovery off the coast of Senegal. The SNE-1 well, located near its FAN-1 well where it found oil on 7 October, could hold 150-670 million barrels of recoverable resources according to preliminary findings.
Engineering data and design IT systems provider Aveva (AVV) rallies 5% to £14.65, despite posting a 21% drop in half year revenues, as it confirms that it is on track to meet revised down full year forecasts. Market estimates were cut in September following the company's profits warning as oil industry workloads and currency swings put the squeeze on.
Funeral services provider Dignity (DTY), a running Shares Play of the Week, puts on 10p at £15.45. Its third quarter trading statement shows sales and operating profits up significantly, supported by a rise in the number of deaths.
Insurance claims oursourcer Quindell (QPP:AIM) falls foul of the market again after putting out a statement that appears to contradict last week's hefty director share buying. Board members appear to have sold shares to pay for much more modest purchases in a complex deal that commits the sold stock to be bought back in the future, although the shares will not be loaned out for short-selling. But investors are put-off by an apparent about face, selling the shares more than 12% lower at 104p.
Agriculture, food and engineering combine Carr's Milling Industries (CRM), a running Shares Play of the Week, cheapens 1p to £16.50. Despite delivering record annual pre-tax profits, up 7.8% to £16.6 million, a mixed outlook statement flags challenges ahead for the agriculture and engineering divisions.
Premium drinks tiddler Distil (DIS:AIM) fizzes 30% higher to 0.78p after securing some important new listings ahead of Christmas. Shares outlined the minnow's turnaround attractions in June.
Transdermal drug delivery specialist Futura Medical (FUM:AIM) rises 6.2% to 42.5p on its erection-enhancing condom Blue Diamond taking 15% of the Dutch online market a month after its launch.
Male sexual health drug-maker Plethora (PLE:AIM) improves 1.8% to 7p on receiving $5 million from Recordati (REC:MI) following September’s licencing agreement.
House-builder Grainger (GRI) gains 1.3% to 185.9p as it sets-up a residential rental portfolio with regeneration funding specialist Sigma Capital (SGM:AIM).
Small cap security assistance provider Red24 (REDT:AIM) jumps 3.5% to 10.23p as earnings per share (EPS) grow 14% in the first six months of its financial year, to the end of September. Chairman Simon Richards says an improving balance sheet and good outlook enable the business to increase its interim dividend by 4.5% to 0.23p.
