Market Update & Important Indicators:
U.S. stocks lost ground Wednesday after the Federal Reserve raised interest rates and reiterated plans for two more increases this year. The Dow Jones Industrial Average lost 0.2%, falling to 24,682. The S&P 500 also fell, dropping 0.2%, whilst the Nasdaq Composite shed 0.2%. Ahead of the announcement, all three indexes swung between small gains and losses for the second straight session following sharp declines to start the week. Some investors had feared the Fed would raise rates four times in 2018, but the central bank reiterated Wednesday plans for three total this year. Still, more officials now think four increases might be necessary, and the Fed also marked up slightly the estimate of interest rates it expects to prevail over the long run. Stocks rose earlier in the session after U.S. trade representative Robert Lighthizer told lawmakers that several key U.S. allies and trading partners won't face steel and aluminium tariffs until negotiations on possible exemptions wrap up next month. Worries that protectionist trade policies could spread following the U.S. tariffs expected to take effect Friday and crimp global economic growth have made some money managers anxious in recent weeks. Energy stocks surged alongside oil prices Wednesday after a weekly report showed U.S. inventories surprisingly decreased during the week ended March 16. The S&P 500 energy sector climbed 2.7%. A rise in metals prices boosted materials stocks, which added 1.3%. The U.S. gold price reacted strongly overnight, rising 1.6% to finish at 1,331.80 US$/oz.
European shares fell 0.16%, or 0.61 points, to 374.96 as the dollar fell against the euro and sterling on nervousness about the timing of U.S. interest rate hikes in 2018. "A growing number of traders are now talking about the possibility of four rate hikes this year," said David Madden at CMC Markets. Germany's Dax fell 0.01% and France's CAC-40 dropped 0.3%. Kingfisher was the biggest faller in the Stoxx Europe 600, down 10.5% after reporting a fourth-quarter slowdown in its U.K. business and an uncertain outlook.
There was placid trading in Asia on Wednesday, where early gains softened amid muted trading volumes thanks to the Japanese public holiday. Hong Kong's Hang Seng Index reversed its morning climb and was last down 0.4%. China's Shanghai Composite Index was down 0.3% and Shenzhen's tech-heavy composite index was down 0.7%. Indexes in Indonesia and India rose by 1% and 0.7%, respectively.
Australian stocks lagged Wednesday as gains in commodity names was largely offset by declines in health care and REITs. The S&P/ASX 200 rose 0.2% to 5950.3 after having fallen in 4 of the prior 6 days. The energy sector climbed 1.2% on oil's 2% jump Tuesday. But health care fell 0.6% and REITs shed 0.5% ahead of the Fed's likely latest rate hike on Wednesday. Hearing-aid firm Cochlear shed 1.8%.
The London Metal Exchange’s 3-month copper contract traded higher overnight, rising 0.56% at 6,793/t. All the other base metals also finished with gains. Aluminium prices rose 0.3% to 2,059/t, whilst nickel prices jumped 0.1% to 13.416/t. Zinc prices rose strongly overnight, increasing by 1.4% to 3,428/t, only to be outdone by tin prices which rose 1.6% to 21,065/t. The biggest gainer overnight was lead prices which increased by 2.1% to 2,401/t.
Recent Contacts & Presentations:
Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH), Australis Oil & Gas Ltd (ATS), Explaurum Ltd (EXU), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU)