Market Update & Important Indicators
Losses in energy shares helped drag U.S. stocks lower Monday as the price of oil fell back toward $40 a barrel. Some investors and analysts said that while falling oil prices are likely to continue to hit energy companies, the ongoing issues with oversupply suggest they don't represent greater problems with slowing economic growth world-wide. Monday's moves come after the Dow Jones Industrial Average posted its sixth-consecutive month of gains in July, even as concerns persisted about the pace of global growth and the course of interest rates.
Meanwhile, in Europe, the eurozone's manufacturing sector also slowed in July, data confirmed Monday, weighing on the region's stock markets. The Stoxx Europe 600 gave up early gains to inch down 0.6%. Banks led losses after regulators announced the results of stress tests late Friday. European bank shares rose in the early minutes of trading after most lenders were given a clean bill of health, but those gains were quickly reversed, with the sector falling 1.8%. Unlike in previous European stress tests, regulators didn't include a pass-or-fail result for each bank, leaving it up to investors and regulators to interpret the results.
Asian shares rose Monday as chances diminished for a near-term U.S. interest rate hike, as investors shrugged off a batch of mixed regional economic data. A hike in U.S. interest rates redirects fund flows from emerging markets – including Asia — to the U.S., and any sign that a hike is less likely tends to be good for Asian stocks. The odds of a September rate increase dropped to 12% from 18%, Fed Funds futures data showed, following news that the U.S. economy grew just 1.2% in the second quarter from a year earlier, well below the 2.6% growth expected by economists polled by The Wall Street Journal. In Japan, the Nikkei Stock Average recovered from earlier losses, which had been driven by the yen's sharp rise Friday. After being down 1.5% in early Monday trade, the benchmark recovered to rise 0.4%, joining in the regional gains. Elsewhere in the region, the Shanghai Composite Index fell 0.9%, as investors were spooked by the flood of initial public offerings coming this week. A total of nine IPOs — seeking up to 9.7 billion yuan ($1.47 billion) in total — are scheduled, nearly double the weekly pace so far this year.
Australian shares rose as mining and energy stocks bounced and attention turned to the Reserve Bank of Australia's policy meeting. The S&P/ASX 200 ended 25 points, or 0.5%, higher at 5587.4 on Monday, as bets rose that the RBA will cut interest rates at its meeting Tuesday for the first time since May.
Copper futures closed lower on Monday, dragged down by falling oil prices and a stronger U.S. dollar. The London Metal Exchange's three-month copper contract was 0.87% lower at $4,885/t at the PM kerb close Monday. Other base metals were mixed. Aluminium closed down 0.7% at $1,626/t, zinc was up 1% at $2,266/t, nickel was up 1% at $10,693/t, lead was flat at $1,813/t and tin was up 0.1% at $17,866/t.
Recent Contacts & Presentations
Hammer Metals Ltd (HMX), Helix Resources Ltd (HLX), Saracen Mineral Holdings Ltd (SAR), Merdeka Copper Gold (MDKA: IJ), Monument Mining (MMY.V: TSX), Apollo Consolidated (AOP), Botanix Pharmaceuticals (BOT), Sino Gas & Energy (SEH), 4DS Memory Ltd (4DS), Troy Resources (TRY), Gold Road Resources (GOR), Bionomics Ltd (BNO), Orthocell Ltd (OCC), Walkabout Resources Ltd (WKT), Migme Ltd (MIG), Syntonic Ltd (SYT), Berkeley Energia (BKY), Hazer Group Ltd (HZR), Linius Technologies Ltd (LNU)