Market Update & Important Indicators:
U.S. stocks fell after the Federal Reserve voted to raise its benchmark interest rate for the first time since December 2015. The Fed raised short-term interest rates by one-quarter percentage point, its first rate rise in a year, saying officials now expect to raise short-term rates more often in 2017. The move suggested ongoing strength in the U.S. economy as the central banks steps away from the monetary stimulus adopted after the financial crisis, some analysts and investors said. Stocks have rallied since the U.S. election on the belief that the president-elect's proposals to cut corporate taxes and ramp up fiscal stimulus will accelerate growth and inflation — factors that could also speed up the pace of interest rate rises. While higher rates tend to drag on equity market valuations, most investors expect the pace of interest rate rises next year to be gradual, allowing companies to adjust. Investors globally have piled into banks, whose stocks have been buoyed in recent weeks by the prospect of higher interest rates and a bigger difference between the yield on short and long dated bonds.
Stock markets across Asia showed little clear direction Wednesday as investors awaited the Federal Reserve's decision on interest rates. Korea's Kospi closed up 0.04% and Hong Kong's Hang Seng Index climbed 0.04%. Taiwan's Taiex slipped 0.1%. Asian markets have been in lockdown so far this week, with the market widely assuming the U.S. central bank will raise rates, but with many traders wanting to avoid being caught out by a surprise Fed inaction. Investors are also waiting for guidance on the U.S. central bank's plans for raising rates in 2017. Elsewhere, Japan's Nikkei closed about flat, as traders processed the Bank of Japan's quarterly tankan survey released Wednesday. The survey showed that sentiment among large manufacturers rose to plus 10 over the three months to December from plus 6 in the previous quarter. A plus figure means the percentage of respondents saying business conditions are favourable exceeds those saying they aren't.
Australian shares Wednesday rose to within distance of the year's highest level, buoyed by broad gains outside the mining and energy sectors. Underpinned by gains among bank stocks, the market recovered from losses the previous session as investors awaited the outcome of the U.S. Federal Reserve's final policy meeting of the year. Economists overwhelmingly expect the Fed will raise interest rates at the conclusion of the meeting later in the global day, which would mark only the second increase in a decade. The S&P/ASX 200 advanced 39.6 points, or 0.7%, to 5584.6–less than three points away from the highest closing level this year to date on Aug. 1. Trading activity for the day was above average, with about 2.9 billion transactions valued at 6.7 billion Australian dollars (US$5.0 billion), Commonwealth Securities said. The four largest banks collectively added almost 13 points to the index, recovering from Tuesday's weakness to resume a steady recovery since early November. The energy and materials subindex finished in the red, dented by a fall in prices for oil and commodities including iron ore.
Copper for delivery in three months was recently up 0.56% at $5,722/t on the London Metal Exchange. The other base metals were mixed overnight. Lead prices fell 0.3% to 2,302/t, and tin prices fell 1.0% at $21.240/t. Meanwhile, aluminium prices rose 0.3% to 1,753/t, nickel prices rose 0.3% to 11,368/t and zinc prices rose 3.9% to 2,792/t.
Recent Contacts & Presentations:
Stavely Minerals Ltd (SVY), Australis Oil & Gas Ltd (ATS), Davenport Resources Ltd (DAV), TFS Corporation Limited (TFC), Emmerson Resources Ltd (ERM), Syntonic Ltd (SYT), MZI Resources Ltd (MZI), Resolute Mining Ltd (RSG), Capricorn Metals Ltd (CMM), Eve Investments Ltd (EVE), Australian Mines Ltd (AUZ), Heron Resources Ltd (HRR), St George Mining Ltd (SGQ), Threat Protect Australia Ltd (TPS), Paringa Resources Ltd (PNL), The Gruden Group Ltd (GGL), Primary Gold Ltd (PGO), Vault Intelligence Ltd (VLT), Botanix Pharmaceuticals Ltd (BOT) Orthocell Ltd (OCC), Strandline Resources Ltd (STA) Dragontail Systems Ltd (DTS), ABM Resources Ltd (ABU)
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