Market Update & Important Indicators
U.S. stocks drifted around the flatline Wednesday, kicking off June on a lacklustre note. The move comes on the heels of gains in May for many indexes. The Dow notched a fourth straight month of gains whilst health-care stocks in the S&P 500 turned higher in midmorning trade, driving Wednesday's action. Energy stocks recouped much of their earlier losses along with oil prices. The Dow and S&P 500 tumbled at the start of the year and then rebounded sharply, but the gyrations have left them roughly at levels hit late last year.
European stocks finished lower Wednesday, with mining shares among the biggest laggards after lackluster Chinese manufacturing data underscored worries about the health of the world's second-largest economy. The Stoxx Europe 600 fell 1% to end at 344.12. The basic materials group lost ground after the release of Chinese manufacturing data. The official purchasing managers index for manufacturing was unchanged at 50.1 in May, while the private Caixin index slipped to 49.2 from 49.4 in April.
Shares in Shanghai and Hong Kong ended a choppy session a touch lower Wednesday after the latest Chinese manufacturing data came in roughly in line with expectations, but still suggested the country's economy is struggling to gain momentum. China's official manufacturing purchasing managers index, a gauge of the nation's factory activity, remained at 50.1 in May, barely marking a third month of expansion. Japan's Nikkei Stock Average fell 1.6% as the yen strengthened, reducing exporters' price competitiveness and cutting into repatriated profit margins.
Australian shares fell sharply Wednesday, hit by broad selling and resources price drops. The market had briefly retraced some of its losses after the release of stronger-than-expected economic growth figures, only to brush off the data even as the local currency pushed higher. Falling for a second straight day, the S&P/ASX 200 was down 55.4 points, to 1%, to finish at 5323.2. Resources shares led the broad declines, with both the energy and materials sectors losing more than 1.5%. Figures released during the session showed first-quarter gross domestic product grew 1.1% from the prior quarter and 3.1% from a year earlier, bolstered by rising volumes of exported iron ore and liquefied natural gas. The data buoyed the Australian dollar, pushing it to its highest levels in almost two weeks against the U.S. currency.
Copper futures closed lower in London, following weaker-than-expected manufacturing data out of top consumer China. The London Metal Exchange's three-month copper contract was down 1.1% at $4,619.50 a ton at the PM kerb close, having hit a five-day low earlier in the session at $4,565.50 a ton. Among the other base metals, aluminium was up 0.8% at $1,557 a ton, zinc was up 2.4% at $1,968 a ton, nickel was up 0.5% at $8,432 a ton, lead was up 0.5% at $1,705 a ton.
In this Issue
Dacian Gold (DCN) | More from Morgans | SPEC BUY
Market Cap $268m | Current Price $2.02 | Valuation $2.30
Dacian Gold (DCN) announced further high grade gold intercepts from the Morgans Underground prospect, part of the Mt Morgans Project in Western Australia. Better intercepts included 4.3m at 22.4g/t and 12.0m at 5.7g/t. The Resource drill out has increased geological understanding identifying a number of stacked shallow northerly plunging mineralised surfaces. Condensed mineralisation along these trends bodes well for increased ounces per vertical metre (potentially 2,000-3,000oz pvm) and could facilitate larger scale underground stope mining. Morgans remains open along strike north and south. DCN will continue to supply high impact newsflow throughout CY16 from ongoing regional exploration, pending assay results from Westralia, Resource updates on all deposits and Maiden Reserves estimates leading into a Feasibility Study due late 2016. SPEC BUY maintained with a revised $2.30 target price (previously 1.88).
Recent Contacts & Presentations
Cradle Resources (CXX), Saracen (SAR), Gold Road Resources (GOR), Regis Resources (RRL), Gascoyne Resources (GCY), Botanix (BNE), Sino Gas & Energy (SEH), Altura Mining (AJM), Navitas (NVT), Gage Roads (GRB), Bionomics (BNO), Invigor Group
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