Market Update & Important Indicators:
Shares of technology companies fell around the world Monday, extending Friday's steep declines in the U.S. giants that had been driving this year's stock-market gains. The tech-heavy Nasdaq Composite fell 0.8%. The S&P 500 lost 0.1% and the Dow Jones Industrial Average fell 36 points, or 0.2%, to 21,236. Several large tech companies have led this year's rally, prompting concerns that major indexes' gains have been overly concentrated in a handful of stocks. Tech shares in the S&P 500 have climbed roughly 17% this year, while the Nasdaq has risen 15%. Analysts have cited a series of critical research notes of big-name players like Apple as the trigger for the selloff, but after the run-up, the sector "was ripe for a pullback of some sort," said Mark Luschini, chief investment strategist for Janney. Energy shares in the S&P 500 rose 0.7% on Monday, buoyed by rising oil prices. U.S. crude futures gained 0.9% to $46.24 a barrel, after falling 3.8% last week. The U.S. gold price fell slightly over night, dropping 0.1% to 1,265.50 US$/oz.
The Stoxx Europe 600 dropped 1% to end at 386.62 on Monday, weighed down by a 3.6% drop in the tech sector. U.K. stocks slipped, hampered by ongoing questions about the political landscape in Britain after the Conservative Party lost its parliamentary majority last week. The FTSE 100 fell 0.2% to end at 7,511.87, suffering its fifth loss in six sessions. The benchmark on Friday shot up 1%, aided by a slide in the pound below $1.27 after U.K. Prime Minister Theresa May failed in her bid to expand the Conservative Party's grip on power in the House of Commons. The FTSE pared Monday's decline as the pound fell again, but sterling's slump was not enough to let the stock gauge settle higher. "The hung parliament outcome from the general election is still hanging over the London market, and will continue to do so until investors have some clarity about the U.K.'s political future," wrote David Madden, market analyst at CMC Markets.
Declines in tech shares hit stock markets in Asia on Monday. Leading the way lower was Hong Kong's Hang Seng Index, which slid 1.2% amid declines in internet heavyweight Tencent. Korea's Kospi also fell 1%, whilst in Taiwan, home to several key Apple suppliers, the Taiex declined 0.9%. Japan's Nikkei Stock Average fell 0.5% as exporters were hit by a slightly stronger yen and the Shanghai Composite Index fell 0.6% in its worst day in a month. Australian equity markets were closed Monday for the Queen's Birthday holiday.
The London Metal Exchange's three-month copper contract closed 0.63% lower on Monday at $5,772/t. The other base metals finished mainly lower. Aluminium prices dropped 1.1% to 1,880/t, lead prices dropped 2.3% to 2,031/t, nickel prices fell 2.1% to 8,736/t, zinc prices fell 1.6% to 2,476/t. Tin prices bucked the trend rising 1.3% to 19,180/t.
Thought of the day:
Argonaut Metals and Mining | Quiet before the storm
Key macro factors expected to positively impact commodity prices include improving economic sentiment in the US and China’s “One Belt, One Road” initiative. However, an expected appreciation of the US dollar (yet to materialise), cooling of the Chinese housing sector and global geopolitical tensions, primarily between the US and North Korea, could drive negative sentiment towards mineral commodities. Gold as a defensive investment remains a key theme. After a strong first Q1 CY17, resource equities ended the finical year in a lull. We see, finalisation of the GDX gold rebalance, M&A and pre-Diggers and Dealers conference news flow as potential catalysts to reignite the sector. Key Picks: DCN, IGO, MMI, NST, RRL
Recent Contacts & Presentations:
Bionomics Ltd (BNO), Threat Protect Australia Ltd (TPS), Ramelius Resources Ltd (RMS), Zenith Energy Ltd (ZEN), Blackham Resources Ltd (BLK), Top End Minerals Ltd (TND), Northern Star Resources Ltd (NST), Xanadu Mines Ltd (XAM), Dacian Gold (DCN), Egan Street Resources Ltd (EGA), Alice Queen Ltd (AQX), Paringa Resources Ltd (PNL), AWE Limited (AWE), Saracen Mineral Holdings Ltd (SAR), Red River Resources Ltd (RVR), Vital Metals Ltd (VML), Prairie Mining Ltd (PDZ), Hotcopper Holdings Ltd (HOT), Resolute Mining Ltd (RSG), Botanix Pharmaceuticals Ltd (BOT), Pantoro Ltd (PNR), Beadell Resources Ltd (BDR), Investigator Resources Ltd (IVR)
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