Market Update & Important Indicators:
Investors bought financial stocks Wednesday following data that suggested ongoing growth in the U.S. economy. The strongest monthly gain for inflation in almost four years in January and retail sales that rose more than expected helped boost confidence in ongoing U.S. growth, some analysts said. Along with an upbeat assessment of the economy from Federal Reserve Chairwoman Janet Yellen, who returned to Capital Hill Wednesday to testify before the House Financial Services Committee, that data could spur the central bank to raise rates sooner than some expected. Low interest rates have helped underpin stock and bond prices in recent years. Still, many investors say the kind of gradual path of rate increases the Fed has signalled amid a growing economy shouldn't derail major stock indexes and would be positive for financial stocks that tend to benefit from higher rates.
European stocks booked a seventh straight advance on Wednesday, with banks leading the gains after Federal Reserve Chairwoman Janet Yellen sparked a rally in financial stocks by hinting U.S. interest rates soon will go higher. The Stoxx Europe 600 index climbed 0.3% to 371.47, logging its highest close since December 2015. The benchmark seven-day gain, marks its longest run since the period ended July 20, 2015, according to Dow Jones data. The positive trading mood in Europe follow came after Fed chief Yellen on Tuesday struck a hawkish tone and said rates could rise sooner rather than later. Even if yields are still extremely low in Europe, the continent's banks are likely to get a boost from tighter policy in the U.S., as most of them also do business overseas.
Stocks in Asia were mostly higher, with the Nikkei Stock Average climbing 1% and Hong Kong's Hang Seng Index rising 1.2%. In Japan, the expectation of higher bond yields boosted insurers. Elsewhere, Chinese equity markets were slightly lower with China's Shanghai Composite Index down 0.2%.
A rally by banks on the back of a record half-year profit from Commonwealth Bank of Australia helped drive the local stock market to its highest close in 21 months. A solid first-half report from the country's biggest bank and a relatively positive outlook from its chief executive on the prospects for Australia's economy further bolstered investor sentiment that had been lifted by renewed optimism about the U.S. economy after Federal Reserve Chairwoman Janet Yellen signalled Tuesday the central bank could consider raising short-term interest rates at its next policy meeting. The prospect of higher rates in the world's biggest economy and improving margins helped buoy U.S. bank stocks and lifted the Dow Jones Industrial Average to its sixth high of the year. Ending near its high of the session, the S&P/ASX 200 added 53.9 points, or 0.9%, to settle at 5809.1. The four largest banks, among the largest stocks in the ASX 200, collectively added more than 27 points to the index.
The London Metal Exchange's three-month copper contract closed up 0.8% at $6,067/t. The other base metals were mixed on Wednesday. Aluminium prices rose 1.3% to $1,900/t, and nickel prices rose 1.5% to $10,874/t. Zinc prices dropped 1.2% to $2,869/t, tin prices declined 0.3% to $19,843/t and lead prices fell 1.5% to $2,314/t.
Recent Contacts & Presentations:
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), Acacia Coal Ltd (AJC), Troy Resources Ltd (TRY), Hazer Group Ltd (HZR), Berkeley Energia Ltd (BKY), Sino Gas & Energy Holdings Ltd (SEH), Sovereign Metals Ltd (SVM), Kin Mining (KIN), Vital Metals Ltd (VML), Mincor Resources (MCR), Dacian Gold (DCN), Leaf Resources Ltd (LER), Alchemy Resources Ltd (ALY), OpenDNA Limited (OPN), MZI Resources Ltd (MZI)