Market Update & Important Indicators:
U.S. stocks jumped in the last hour of trade, sending all 11 S&P 500 sectors higher after a rocky start to the quarter. Trading was volatile, with stock indexes hovering between small gains and losses before buying accelerated in the final hour of the trading day. The Dow Jones Industrial Average finished 389 points higher, or 1.6%, to 24,033, recouping losses after falling nearly 2% Monday, while the S&P 500 added 1.3% and the tech-heavy Nasdaq Composite climbed 1%. Technology shares helped lead the rebound, with all of the so-called FAANG stocks — which includes Facebook, Amazon.com, Apple, Netflix and Google parent Alphabet – rising following a heavy bout of selling Monday. Facebook rose 0.6%, while Apple added 1% and Amazon rose 1.9%. The U.S. gold price was sold down as a result of the market bounce back, dropping 0.64% to finish at 1,332.20 US$/oz.
European stocks finished lower, beginning the second quarter of 2018 dogged by the same technology-sector and trade-war worries that hurt equity markets during the first quarter. The moves tracked a Monday selloff in U.S. stocks, when European markets were closed for the Easter break. But Wall Street's major indexes were showing signs of recovery after the rough start to the month's trading. European equity markets restarted trading after closures for the Good Friday and Easter Monday holidays. The Stoxx Europe 600 index fell by 0.5% to end at 367.07, led by losses for the industrial sector. The oil and gas sector latched on to a modest gain. On Thursday, the pan-European index rose 0.4%, but finished first-quarter trade down by 4.7%.
Asian stocks were mostly lower as several markets in the region returned from the Easter holiday, with fears of an escalating trade war between the U.S. and China weighing on investor confidence. The Shanghai Composite sank 0.8%, the Nikkei Stock Average fell 0.5%, Taiwan's TAIEX closed 0.6% lower and the FTSE Straits Times Index was down 0.8%, wiping out gains for the year. Brokers say speculation that China's retaliatory efforts may not dampen global trade too much helped spur a bout of midday risk-taking that lifted S&P 500 futures 0.4%, also pushing Hong Kong's Hang Seng Index 0.3% higher by the close. Japanese stocks saw initial selloff following China's retaliatory tariffs on U.S. goods which invited some dip-buying. Still, gainers were mostly defensive stocks catering to domestic demand. The Nikkei ended down at 21292.29.
A late pullback left Australia's stock benchmark in the red, although gains by miners and a rally in the shares of Santos softened the day's decline. After the long Eastern weekend, the S&P/ASX 200 settled 0.1% lower at 5751.9, a third straight fall. ANZ led the major banks lower with a drop of 1.2%, while industrial stocks and consumer discretionary shares also retreated. Still, BHP Billiton and Rio Tinto jumped 1.8% and 2.1%, respectively, and fellow diversified miner South32 climbed 1.9%. Santos soared 16%, off the day's highs, after it said it would grant suitor Harbour Energy a chance to conduct due diligence on a takeover bid.
The London Metal Exchange’s 3-month copper contract rose overnight, jumping 1.2% at 6,796/t. The other base metals were mixed overnight. Zinc prices continued their gains, from the Easter break, rising 0.2% to 3,291/t, whilst tin prices also jumped higher, rising 0.4% at 21,252/t. Nickel prices were the biggest base metal gainer, rising 1.2% to 13,419/t. Falling overnight was aluminium prices which lost 1.3% at 1,960/t, whilst lead prices remained unchanged at 2,394/t.
In this issue:
Dacian Gold (DCN) | Hitting the ground running at Mt Morgans | BUY
Market Cap $628m| Current Price $3.05| Target Price: $3.66
Dacian Gold (DCN) has reported its first gold production at the Mt Morgans Gold Mine in Western Australia. First gold was poured on 29th March in line with the feasibility forecasts for a completion in the March Q CY18. Guidance has been updated with production in the June Q CY18 of 30-40koz and FY19 production of 180-210koz and is reflective of a conservative 6-9-month production ramp-up. An additional 45koz hedge facility at A$1,727/oz was implemented to insulate short term cashflow. Exploration continues aggressively at Beresford and Cameron Well with an updated Resource and Reserves expected in the 1HFY19. DCN trades on undemanding EV/Production metrics, and as a result of the transition to production, we expect that DCN’s discount to our NAV and its peer group valuations will gradually unwind. BUY, TP $3.66ps ($3.39 prior).
Recent Contacts & Presentations:
ABM Resources Ltd (ABU), Vital Metals Ltd (VML), Todd River Resources Ltd (TRT), Pacific Energy Ltd (PEA), Carnarvon Petroleum Ltd (CVN), Australian Mines Ltd (AUZ), Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH)
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