Market Update & Important Indicators:
U.S. stocks charged toward fresh highs Wednesday, as broad gains offset a slide in health-care stocks. Investors have scooped up stocks and dumped bonds since the U.S. presidential election, betting that President-elect Donald Trump's policies would accelerate economic growth. The gains have particularly benefitted the shares of banks and industrial companies, which have outperformed the broader market and, helped lift the Dow Jones Industrial Average to 11 records since the Nov. 8 election. The blue-chip index rose again Wednesday, on course to set another high. Many analysts expect the rally to continue in 2017, noting that gross domestic product has grown, the labour market has continued to strengthen and corporate earnings are on the mend. While the broader market has rallied, individual sectors and stocks have fluctuated on Mr. Trump's comments, traders and analysts said. The S&P 500 health-care sector fell 1%, with shares of pharmaceutical companies posting some of the biggest losses. The Nasdaq Biotechnology Index declined 2.8%. In European markets, the Stoxx Europe 600 gained 0.9%, boosted by a rise in the banking sector.
Asian shares were broadly higher Wednesday, catching a lift from gains in the U.S. and as a weak Japanese yen helped exporters' stocks on the Nikkei Stock Average. The Nikkei ended up 0.7% at 18496.69 points, a four-day high. S&P/ASX 200 ended 0.9% higher. The Kospi added 0.1% and Hong Kong's Hang Seng Index was last up 0.5%. Bank stocks across Asia were benefiting from reports that Italy was preparing to take a €2 billion euro ($2.1 billion) controlling stake in Banca Monte dei Paschi di Siena, one of the country's many troubled banks. The Japanese Topix index that tracks banks finished up 2.4%. In China, the Shanghai Composite Index reversed losses to close up 0.7%, despite concerns about the impact an unfolding insurance sector clampdown might have on the market.
Australian shares notched a second straight advance Wednesday, despite data showing the economy contracting for the first time in years, as banks and miners led broad share gains. The market initially stumbled, but then pushed higher after the release of data showing gross domestic product shrank 0.5% in the three months through September from the previous quarter, weaker than the 0.1% contraction forecast by economists. It was the first contraction since early 2011, although flagged a day earlier by Reserve Bank of Australia Gov. Philip Lowe, who said the economy would likely slow in the latter part of 2016 before picking up again. Yet the S&P/ASX 200 took its lead from stronger U.S. stocks overnight, and rose 49.4 points, or 0.9%, to finish at 5478.1. Financial shares rose 1.2% for the day, with the four largest banks collectively adding about 19 points to the ASX 200. The basket of materials stocks gained 1.1%, helped by a rise in Chinese steel and iron-ore futures. Only energy stocks closed in the red, with oil futures extending losses in Asian trade as investors paused to consider the direction of crude prices following gains after last week's agreement by the Organization of the Petroleum Exporting Countries to curb output.
On the London Metal Exchange, copper for delivery in three months was down 1.68% at $5,785/t. All other base metals were mainly down Wednesday. Nickel prices fell 1.8% to $11,362/t, lead prices fell 0.6% to $2,308/t, tin prices fell 0.3% at 21,236/t, whilst zinc fell 2.2% to 2,721/t. Aluminium prices finished flat at 1,711/t.
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