14/05/2018 Argonaut Morning Note

European shares pared losses to rise 0.1% as Swiss chemical group Sika and oil services company John Wood Group made gains. The Stoxx Europe 600 advanced 0.1% to 392.4 as Sika lifted 8.1% after signing an agreement with French building material supplier Saint-Gobain to end a takeover battle. Wood gained 10% after upbeat first-quarter trading. Retailer H&M Hennes & Mauritz was the biggest pan-European faller, down 4%. 

Japan's Nikkei rose 1.2%, while Hong Kong's Hang Seng was up 1%. Malaysian markets remain closed until Monday after a surprise opposition win in elections. But Ample Capital's Mr. Wong added that it is too early to make the call that the market has turned a corner, as many investors are remaining on the sidelines while the U.S.-China trade spat continues. Equities in mainland China bucked the trend in Asia, with the Shenzhen A-Share Index falling 1%. Not all analysts saw the weaker inflation figures as a reason to change their views on the Federal Reserve's pace of interest-rate increases. Used car sales were a major contributor to the fall in consumer price growth. 

Aussie stocks slowly faded throughout the afternoon, resulting in the benchmark joining China as the only Asia-Pacific markets lower today. The S&P/ASX 200, though, still racked up a 6th-straight weekly gain–the strongest run in 2 years–at 0.9%. But further weakness in the major banks and a pause for the hot energy sector left the index down 2.5 points for the day at 6116.20. AMP was again one of the biggest drags, losing a further 5.8% to near-7-year lows after it confirmed yesterday it faced 2 class-action lawsuits. It was the stock's 2nd 10% weekly drop in a month. Meanwhile, miners were a bright spot today with BHP and Rio Tinto each gaining more than 1% following dollar-driven overnight gains in metals prices. 

Base metals were mainly up on the London Metal Exchange. The 3-month copper contract gained 0.4% to 6,909/t. zinc declined 0.3% to 3,064/t, and lead finished 1.8% higher at 2,333/t. Nickel appreciated 1.3% to 13,995/t while tin was up 0.8% to finish at 21,038/t. Aluminium recorded the largest fall of 2.2%% to close at 2,330/t.