Market Update & Important Indicators
US stocks fell modestly as a key consumer confidence measure came in lower and the government confirmed that the economy contracted in the first quarter. The Dow Jones Industrial Average lost 115.44 points (0.64 per cent) to 18,010.68. The broad-based S&P 500 shed 13.40 points (0.63 per cent) at 2,107.39, while the tech-rich Nasdaq Composite Index fell 27.95 (0.55 per cent) at 5,070.03. Analysts said there was some disappointment with the economic news released on Friday. The revised GDP figure for the first quarter, showing a 0.7 per cent contraction, was not a surprise. But perceptions of a rebound in growth since then were tempered by a fall in the May Chicago regional business activity index, into negative territory, and a sharp fall in the University of Michigan's consumer confidence index to 90.7 from 95.9 in April.
Europe's equity markets have slumped on the final day of a Group of Seven finance meeting, dominated by festering concerns over Greece and pressure from the US and Japan to resolve the debt crisis. Investors are increasingly worried that Greece and its creditors could fail to reach an agreement on reforms tied to its bailout and Athens could struggle to meet looming debt repayments next week. In the eurozone, the CAC 40 in Paris plunged 2.53 per cent to end Friday at 5,007.89 points, and Frankfurt's DAX 30 tumbled 2.26 per cent to 11,413.82 points. London's benchmark FTSE 100 index of top companies dropped 0.80 per cent compared with Thursday's close to close at 6,984.43 points. The European single currency meanwhile firmed to $US1.0971 from $US1.0947 late in New York on Thursday. While Greece was not officially on the agenda of the Dresden meeting – which was preparing for a wider summit of G7 leaders starting on June 7 – Athens' troubles dominated the talks. “All parties need to move" in the Greek negotiations, US Treasury Secretary Jack Lew told reporters on Friday.
Japan's Nikkei has chalked up an eleventh straight gain with the yen sitting around 12-year lows against the dollar. Shanghai, meanwhile, extended losses on Friday following the previous day's hefty plunge. The euro continues to face downside pressure over concerns Greece and its creditors will not reach a bailout agreement, with the head of the IMF warning the crisis could end with the country leaving the eurozone. Tokyo pared most of its early losses but ended marginally higher, adding 11.69 points to end at 20,563.15 – the index is now enjoying its best rally since February 1988 at the height of Japan's stock market bubble. Shanghai, which slumped 6.50 per cent on Thursday, ended 0.18 per cent, or 8.53 points, lower at 4,611.74 after a volatile day that saw it swing from a 4.08 per cent loss and a 1.69 per cent gain. Hong Kong slipped 0.11 per cent, or 30.12 points, to close at 27,424.19.
The Australian market looks set to open lower, following falls in US stocks. The June share price index futures contract was down 17 points at 5,761. The main Wall Street stock indexes were down by about 0.6 per cent on Friday, after a key consumer confidence measure came in lower and the government confirmed that the economy contracted in the first quarter. Locally on Monday, the Australian Bureau of Statistics releases building approvals figures for April and business indicators for the March quarter. The RP Data Core Logic Home Value Index, the Australian Industry Group performance of manufacturing index and the TD Securities-Melbourne Institute inflation gauge are also due out. In equities news, UGL releases a market update. In Australia, the market on Friday has its best single-day gain in a month as investors snapped up beaten-down stocks. The benchmark S&P/ASX200 index was up 64.1 points, or 1.12 per cent, at 5,777.2 points. The broader All Ordinaries index was up 60.3 points, or 1.06 per cent, at 5,774.9 points.
Crude prices have jumped more than $US2.00 amid more signs of US tightening and after another deadly attack on Shi'ites claimed by Islamic State in the heart of Saudi Arabia's oil industry. US benchmark West Texas Intermediate (WTI) for July delivery rose US2.62 to $US60.30 a barrel in New York trade on Friday. In London, Brent crude for July gained $US2.98 to $US65.56. The second bomb attack in a week on a Saudi Shi'ite mosque in the country's oil-rich Eastern Province help spark the price gains. The attack, which killed three, took place in Dammam, just a few kilometres from both the headquarters of Aramco, the powerful Saudi state oil company, and the crucial RasTanura oil terminal and refinery. US prices were supported by a fall in the Baker Hughes US rig count, suggesting the industry is still cutting back activity. The US count fell by 13 to 646 active oil drilling rigs. A year ago, the total was 1,536. That combined with a fall Wednesday in US stockpiles to suggest tighter supplies in the future. "There was some expectation and some anxiety that the rig count could come out as a positive number today," said Bob Yawger of Mizuho Securities. "Instead it was down 13. We haven't seen a number that big in a couple of weeks," he said.
Brent rose 1.2% to US$63.88/bbl. Metals on the LME were down across the board with Aluminium and Zinc posting the biggest losses, down 2.3% and 2.1% respectively. Gold was up 0.2% to US$1190/oz. Iron ore fines fell 0.8% to US$61.85/t.
In This Issue
PuraVida (PVD) | SPUD OF MZ-1 WELL
The Atwood Achiever Deepwater Drillship has spud the MZ-1 well and drilling operations have commenced
• Drilling is expected to take approximately 2 to 3 months
• Located in water depth of 2,176 metres, drilling to 5,600 metres with potential to deepen to 6,150 metres
• MZ-1 is expected to test 4, and potentially 5, independently risked, stacked prospects at an optimal location increasing the overall chance of success
• Preliminary results are scheduled to be released shortly after the well has drilled through the shallow Cretaceous targets and then again once the well has drilled through the deeper Jurassic targets
Recent Contacts & Presentations
Orbital (OEC), Site Group (SIT), Saracen (SAR), Kibaran (KNL), Sino Gas & Energy (SEH), Rewardle (RXH), Alexium (AJX), Ausdrill (ASL), Tox Free (TOX), OBJ Limited (OBJ), Dacian (DCN), Saracen (SAR), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MZI Resources (MZI), High Peak Royalties (HPR), Spookfish (SFI)