Market Update & Important Indicators:
Major stock indexes recovered their early losses in another volatile session Wednesday, as investors bet the recent trade disruptions between the U.S. and China are negotiating tactics and the countries will ultimately reach a compromise. Shares of chip makers, manufacturers and machinery companies initially came under pressure after China unveiled plans for a series of retaliatory tariffs on American goods. But stocks erased those declines in afternoon trading, as some analysts said knee-jerk selling on worries that protectionist trade policies could slow global economic growth might have been overdone. The Dow Jones Industrial Average added 1% after dropping as much as 510 points in the opening minutes of trading. The S&P 500 climbed 1.2%, and the Nasdaq Composite gained 1.5%. China's tariffs would place 25% duties on major American exports to China including airplanes, autos and soybeans, covering 106 categories of products and affecting $50 billion of goods. The announcement came hours after the Trump administration unveiled plans to impose tariffs of 25% on Chinese products worth $50 billion in addition to the levies introduced on steel and aluminium last month. Retaliatory Chinese levies on U.S. pork and fruit went into effect earlier this week. Recent trade worries have come as unease over stricter regulation and data privacy have dragged down highflying technology and internet stocks that led the market higher in recent months. The U.S. gold price was largely unchanged overnight, rising 0.05% to finish at 1,332.80 US$/oz.
European shares ended the session 0.47% lower as tech stocks declined in response to the escalating trade tensions between the U.S. and China. The Stoxx Europe 600 dropped 1.74 points to 367.33 as BE Semiconductor Industries led chip-makers lower with a 4% drop.
Asian stocks sold off on Wednesday, with early falls accelerating after China announced new tariffs on $50 billion of American goods in response to the news of fresh U.S. duties targeting China on Tuesday. Beijing's countermove came after the Trump administration late Tuesday threatened to hit an identically valued $50 billion of Chinese imports with tariffs, in addition to the levies introduced on steel and aluminium last month. The Asia-Pacific indexes that were still trading also registered investors' growing alarm. Hong Kong's Hang Seng fell 2.2% and Singapore's Strait Times index was down 1.8%. Similarly, the South Korean Kospi closed 1.4% down. Shanghai's composite index ticked down 0.2% and Shenzhen's composite index was down 0.6%.
A steady recovery through the afternoon by banks, energy companies and others helped lift Australia's stock benchmark to a modest gain, snapping losses the last three sessions. Amid a mixed session across the region as investors continue to worry about a trade war between the US and China, the S&P/ASX 200 rose 0.2% to 5761.4. Though gains were led by property trusts, a turnaround after midday by several big banks helped buoy the market, with Commonwealth Bank leading as it climbed 0.8%.
The London Metal Exchange’s 3-month copper contract fell overnight, losing 1.06% at 6,724/t. The other base metals were mainly lower overnight. Zinc prices declined 0.8% to 3,263/t, whilst lead prices shed 1.0% to 2,370/t. Tin prices dropped 1.4% to 20,948/t, whilst nickel prices fared the worst out of the base metals, falling 2.4% to 13,100/t. Aluminium prices were the only gainer in the LME base metals, rising 0.5% to 1,969/t.
In this issue:
Myanmar Metals (MYL) | Awakening a Giant | SPEC BUY
Market Cap $36m | Current Price $0.06 | Target Price $0.25
Myanmar Metals (MYL) holds an option to acquire a majority stake in the Bawdwin Mine in Myanmar, which we regard as the best under-exploited polymetallic asset globally. Large scale mining at Bawdwin ceased during WWII leaving intact a high-grade core resource of 41.4Mt at 5.7oz/t silver, 11% zinc & lead and 0.33% copper. MYL is scheduled to exercise its option on Bawdwin in May and gain a 51% majority stake and operatorship of the mining concession which incorporates the resource, a 38km2 land holding, hydro power, and access to strategic transport routes and water. SPEC BUY recommendation.
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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