Market Update & Important Indicators:
U.S. stocks extended gains Thursday, bolstered by reassurance that major central banks weren't on the verge of pulling back from easy-money policies. The Federal Reserve left short-term interest rates unchanged and the Bank of Japan revamped its policy Wednesday, easing investors' concerns that had cropped up in recent weeks about central banks' willingness to support growth. Investors who had waited in anticipation of the Fed's decision felt comfortable about jumping back in again, particularly in interest-rate sensitive stocks, said Mr. Yu. All 11 sectors in the S&P 500 rose Thursday, led by real-estate stocks, which surged 1.6%.
European stock markets scored solid advances after the U.S. Federal Reserve refrained from raising interest rates and said it needs more evidence of a stronger economy before it tightens policy. The Stoxx Europe 600 index rallied 1.6% to end at 347.86, giving the regional benchmark a second straight day of gains. Mining and oil firms were among the biggest advancers, scoring a boost from a weaker dollar in the aftermath of the Fed decision, released after the European close on Wednesday. Traders in Europe and the U.K. closely watch where U.S. interest rates are headed, as they are a major driver for the global economy and currency markets.
Asian stocks gained Thursday, buoyed by the U.S. Federal Reserve's decision not to raise interest rates, and also by rising commodity prices. The Hang Seng Index in Hong Kong closed up 0.4%, Korea's Kospi ended 0.7% higher, while the Shanghai Composite Index closed at 0.5%. The Japanese share market was closed for a public holiday. The Federal Reserve opted to hold its key short-term interest rate steady on Wednesday. Asia-based traders welcomed the news as a rate rise would have pulled money out of emerging markets. Fed officials also cut their 2016 growth forecast for the U.S. economy to 1.8%, from a 2.0% projection in June, and lowered their long-term view on the growth rate to 1.8% from 2%. The Fed's move followed an announcement Wednesday by the BOJ, which has struggled for nearly two decades to bring about steady inflation, that it left unchanged its negative interest rate on excess deposits with the central bank. It also said that it would introduce a 10-year interest-rate target – action that amounted to a commitment to steepen the yen yield curve.
Resources stocks helped lift Australian shares to a two-week high Thursday as commodity prices rose with weakness in the U.S. dollar after the Federal Reserve opted against raising interest rates. The Fed's widely anticipated decision overnight came after the Bank of Japan on Wednesday left its main interest rates unchanged but said it would continue with its asset-purchase program and introduced an interest-rate target for 10-year government bonds in an effort to stoke inflation. In a second straight session of strong gains after a cautious start to the week, the S&P/ASX 200 climbed 34.9 points, or 0.7%, to 5374.5 – its highest close since Feb. 8, despite losing some steam in the final hour of trading. The dollar fell against currencies including the Australian dollar after the Fed decided to hold short-term interest rates steady.
The London Metal Exchange's three-month copper contract closed up 1.9% at $4,853/t. Aluminium closed up 3.4% at $1,627/t, zinc rose 1.1% at $2,284/t, tin rose 1% to $19,496/t, nickel rose 3.1% to $10,616/t, and lead rose 0.7% to $1,941/t.
In this Issue:
Berkeley Energia (BKY) | First off-take for Salamanca | BUY
Mkt Cap $166m | Current price $0.83 | Target price $2.00
Berkeley Energia (BKY) has signed a letter of intent (LOI) with European trader Interalloys Trading Ltd for the sale of up to 1mlb U3O8 from the Salamanca project in Spain. The contemplated price of US$41/lb is well above both the current spot and term prices (US$25/lb and US$39/lb respectively). This provides high margins against estimated total cash costs of <US$20/lb. Argonaut sees further potential for additional off-take and strategic partnerships as BKY progresses to construction in late-2016 / early 2017. Exploration is expected to provide a steady stream of newsflow as the Company drills high priority targets within a 10km radius of the planned plant location.
Thought of the day:
Mining Services – We’re back! Well, sort of…
FY15 was a year for write-downs and very messy numbers for mining services. FY16 was a year that saw cost cutting, cleaner financials and signs of a bottom. Where to in FY17?
Recent Contacts & Presentations:
Dakota Minerals Ltd (DKO), Breaker Resources NL (BRB), Bard1 Life Sciences Ltd (BD1), Alto Metals Ltd (AME), Birimian Limited (BGS), Antipa Minerals Ltd (AZY), Vault Intelligence Ltd (VLT), Noxopharm Ltd (NOX), Gage Roads Brewing Co. (GRB), West African Resources (WAF), Cedar Woods Properties Ltd (CWP), Sino Gas & Energy Holdings Ltd (SEH), Salt Lake Potash Ltd (SO4), Kalina Power Ltd (KPO), Austal Limited (ASB), Agrimin Ltd (AMN), Stavely Minerals Ltd (SVY), MGC Pharmaceuticals Ltd (MXC), Vital Metals Ltd (VML), Tox Free Solutions Ltd (TOX), Swick Mining Services Ltd (SWK), Davenport Resources Ltd (DAV), Orthocell Ltd (OCC), BC Iron Limited (BCI)