Market Update & Important Indicators:
Declines in shares of banks pulled the Dow Jones Industrial Average lower intraday. The blue-chip index fell 50 points, or 0.2%, to 21030.71. The S&P 500 slipped less than 0.1% and the Nasdaq Composite edged down less than 0.1%. Major stock indexes have climbed with few large swings through the first half of the year, bolstered by strength in corporate earnings and the U.S. economy. Many investors say they are now trying to gauge how long favourable economic data and relatively low market volatility can last. U.S. stocks look expensive relative to their historical averages, investors and analysts say, especially as many have trimmed their expectations for deregulation and cuts from the Trump administration. Falling for the day, the U.S. gold price shed 0.3% to finish at 1,262.80 US$/oz.
European stocks dropped almost across the board, with banks leading the charge lower after a broker downgrade and concerns over a potential early election in Italy. Renewed concerns that Greece may not make its next debt repayment also weighed on investor sentiment in Europe. The Stoxx Europe 600 index lost 0.2% to close at 390.50, marking a fourth straight session of losses. The U.K.'s FTSE 100 index fell 0.3% to 7,526.51 as traders returned from a long bank holiday weekend. In Germany, the DAX 30 index fell 0.2% to 12,598.68, while France's CAC 40 index gave up 0.5% to 5,305.94. The Stoxx Europe 600 Banks Index slid 1%, making banks the worst performing group.
In Asia, the Nikkei Stock Average closed broadly flat, having been down as much as 0.6% during the day, as the yen strengthened against the dollar. Japan shares closed 0.02% lower at 19677.85. The Kospi ended 0.4% lower on profit-taking after Monday, ending at its second-highest close ever. Markets in mainland China, Hong Kong and Taiwan remained shut for the Dragon Boat Festival. Elsewhere, Thailand shares closed little changed amid broad weakness in Asian markets. The Thai SET Index was up 0.4 points at 1568.57 points. Singapore shares were down for the third straight session due to broad selling on jittery investment sentiment amid regulatory action on an alleged corruption scandal.
Australian shares bounced back as investors picked up heavily sold bank stocks and a recovery by miners added support. The local market initially built on losses the past two sessions, with a lack of global cues to offer fresh direction as U.S., U.K. and Chinese bourses were closed on Monday. After nearing a three-month intraday low early in the session, the S&P/ASX 200 steadily recovered to finish 10.8 points, or 0.2%, higher at 5717.9. The shift in sentiment was supported by data showing a rise in home building permits in April, rebounding from a slump the month before. Concerns over the property market have heightened in recent months as prices in Melbourne and Sydney have continued to rise even as household debt has grown. Each of the four biggest banks saw gains for the day, eating into an almost 10% fall over the last three weeks since the government outlined plans for a tax on their liabilities to help it balance its budget.
The London Metal Exchange's three-month copper contract closed 0.03% lower on Tuesday at $5,656/t. The other base metals finished mostly lower overnight. Lead prices fell 0.1% to 2,088/t, zinc prices shed 0.4% at 2,613/t, whilst aluminium prices fell 1.4% to 1,923/t. Nickel prices bucked the trend, rising 0.4% to 9,072/t whilst tin prices finished the day flat at 20,550/t.
In this Issue:
Echo Resources (EAR) | Building Resources ahead of production | Spec Buy
Market Cap $51m |Current Price $0.14
Echo Resources is an ASX listed, gold exploration business with a large and highly prospective 1600km2 ground position in the Eastern Goldfields of Western Australia. The Company is focused on successfully developing the flagship Yandal Gold Project into production utilising the 100% owned Bronzewing Processing Hub, while continuing exploration for million-ounce gold ore-bodies within the extensive tenement package. EAR sees potential for the expansion of its existing 965koz resource base via sophisticated structural models targeting known mineralisation controls. EAR believes the extensive transported cover masks the underlying bedrock and gold deposits and that previous explorers had not meaningfully tested the major geological structures in the Yandal Belt. The Company sees a line of sight to production via the 2Mtpa Bronzewing Processing Hub which it believes could be refurbished for ~$12.5m.
Metro Mining (MMI) | Further Offtake for Bauxite Hills | BUY
Metro Mining (MMI) has signed a non-binding letter of intent (LOI) with Shandong Aluminium Company Ltd (Lubei) to supply 0.5-1.0Mtpa of bauxite over three years from the Bauxite Hills Project in Queensland Australia. This takes expected offtake to 60% of production for the first four years of production, incorporating the previously signed binding agreement with Xinfa Group. MMI is on the cusp of commencing development ahead of first production, expected April 2018. Negotiations with debt financiers are well advanced and we expect a funding package to be announced mid-2017. BUY maintained with a 0.$44 target price.
Recent Contacts & Presentations:
Blackham Resources Ltd (BLK), Top End Minerals Ltd (TND), Northern Star Resources Ltd (NST), Xanadu Mines Ltd (XAM), Dacian Gold (DCN), Egan Street Resources Ltd (EGA), Alice Queen Ltd (AQX), Paringa Resources Ltd (PNL), AWE Limited (AWE), Saracen Mineral Holdings Ltd (SAR), Red River Resources Ltd (RVR), Vital Metals Ltd (VML), Prairie Mining Ltd (PDZ), Hotcopper Holdings Ltd (HOT), Resolute Mining Ltd (RSG), Botanix Pharmaceuticals Ltd (BOT), Pantoro Ltd (PNR), Beadell Resources Ltd (BDR), Investigator Resources Ltd (IVR), Echo Resources (EAR), Emerald Resources NL (EMR), PharmaNet Group (PNO), Strandline Resources Ltd (STA)