Market Update & Important Indicators:
The Dow Jones Industrial Average fell 100 points Tuesday as bank shares tumbled. Other post-election trades also reversed, with government bonds strengthening and the dollar sliding to a one-month low. After Election Day, investors betting on higher growth and inflation under President-elect Donald Trump sent the dollar and shares of financial and industrial companies higher while selling long-dated government debt and gold. Yet in recent weeks, many of the most popular trades have stalled. The S&P 500 financials sector slid 2.3%, on track for its worst day in months. Some investors and analysts attributed the day's action to nervousness just days ahead of the presidential inauguration, following steep moves after the November election.
European stocks pared losses Tuesday after U.K.'s Prime Minister Theresa May said Britain will break away from the European Union's single market and British lawmakers will be able to vote on Brexit's terms. May, in a highly anticipated speech in London, said Britain does "not seek membership of the single market but the greatest possible access to it," signalling a so-called hard Brexit from the other 27 members of the EU. But she also said both houses of Britain's parliament will be able to vote on the final terms of a Brexit agreement worked out by U.K. and EU officials. May’s comments reinforce expectations that she will prioritize border and immigration control over access to the common European market. The British pound was down over 1% against the U.S. dollar late Monday as the Stoxx Europe 600 came off session lows to end 0.2% lower at 362.42. The index had been down by as much as 0.7% ahead of May's speech.
Asian shares were mixed on Tuesday ahead of a crucial speech by U.K. Prime Minister Theresa May, with stocks in China reversing early declines in another roller-coaster session. The Shenzhen Composite Index ended up 1.2%, after dropping as much as 1.5% in the early afternoon, while the larger Shanghai Composite Index edged up 0.2%, reversing from losses of as much as 1%. Analysts said they believed government-backed funds in China may have contributed to the stunning recovery on Tuesday, just as they did a day earlier to help to stem Monday's declines. The Nikkei Stock Average ended down 1.5%, whilst Singapore's Straits Times Index fell 0.3%.
Widespread selling dragged Australian shares to their lowest levels of the New Year as investors brace for a speech by U.K. Prime Minister Theresa May on Brexit, and the inauguration of President-elect Donald Trump later in the week. The fall erased Monday's gains, when Australia outperformed equity markets in the region. Financial stocks accounted for a large chunk of the drop, following a strong run by the major banks since the U.S. election. Mining stocks added to broad losses after helping drive the market higher the day before. In the sharpest decline since early December, the S&P/ASX 200 retreated 49 points, or 0.9%, to 5699.4–the lowest level since the end of last year. Australia's four largest banks collectively knocked about 14 points off the ASX 200. The lenders had rallied about 20% since the U.S. election in November, but faltered in recent sessions as analysts questioned valuations.
The London Metal Exchange's three-month copper contract was down 1.9% at $5,754/t. Other base metals were mixed on Tuesday. Aluminium gained 0.3% to $1,802/t, lead rose 1.3% to $2,293/t, and tin rose 0.3% to $21,108/t. Falling overnight, nickel prices fell 1.0% to $10,112/t and zinc prices fell 1.2% to 2,701/t.
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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), Acacia Coal Ltd (AJC), Troy Resources Ltd (TRY), Hazer Group Ltd (HZR), Berkeley Energia Ltd (BKY), Sino Gas & Energy Holdings Ltd (SEH)
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