Morning Notes

15/03/2017 Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks fell with government bond yields intraday as a selloff in the oil market deepened. The Dow Jones Industrial Average slipped 52 points, or 0.3%, to 20829. The S&P 500 lost 0.4% and the Nasdaq Composite fell 0.4%. Losses in shares of energy companies pressured major indexes as U.S.-traded crude oil, which tumbled below $50 a barrel last week, extended recent declines. The S&P 500 energy sector dropped 1.2%. U.S.-traded crude oil fell 1.2% to $47.80 a barrel. The U.S. gold price also continued to decline falling 0.4% at 1,198.60US$/oz. Investors worrying that a ramp-up in U.S. production could offset efforts to reduce a supply glut have sent oil prices sliding for six consecutive sessions through Monday. Recent declines in oil prices have already started to weigh on pockets of high-yield bonds and drag down oil and gas companies shares, according to Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

European stocks closed with their first loss in four sessions, with a selloff in the oil prices knocking down oil shares, while investors stepped back before this week's Dutch election and the Federal Reserve's policy meeting. The Stoxx Europe 600 index fell 0.3% to finish at 373.46, giving up a modest increase earlier in the session. Only the health-care, consumer-goods and tech groups ended higher.

Shares in Hong Kong and Japan were fractionally lower as traders held off on big positions ahead of the Federal Reserve meeting and other global central bank meetings later this week. The Shanghai Composite Index was up 0.1%, however, after data showed industrial production and investment accelerated faster than expected in China in the first two months of the year, and Chinese housing sales growth picked up slightly. Japanese stocks ended down as caution emerged in the market. The Nikkei Stock Average declined 24.25 points, or 0.1%, to end at 19609.50 after a 0.1% gain Monday, when it recorded its highest closing level since December 2015. India's S&P BSE Sensex gained 1.8%. Thai shares end higher, after three consecutive sessions of losses as gains in energy stocks offset losses at some infrastructure counters. The benchmark index closes 0.5% higher at 1,543.15.

Australian shares edged slightly higher, giving up early gains as investors held fire ahead of the Federal Reserve's policy meeting and fresh signals on how rapidly U.S. borrowing costs could rise. The S&P/ASX 200 ended up 1.8 points at 5759.1. After pulling the market lower the day before, energy stocks drove this session's gains as crude oil remained steady in Asian trade after dropping sharply in recent days on indications that U.S. production is ramping up. Mining stocks were also stronger, countering falls by banks, utilities and property trusts.

The London Metal Exchange's three-month copper contract closed up 0.41% at $5,820/t. The other base metals were mostly mixed on Tuesday. Nickel prices rose 0.6% at 10,171/t, tin prices rose 2.6% at 20,030/t, and zinc prices rose 0.2% at 2,731/t. Falling for the day, aluminium prices dropped 1.1% at 1,845/t and lead prices fell 2.5% at 2,209/t.

In this Issue:

Sulphate of Potash (SOP) | Quality product from low-risk jurisdiction

This year will be full of newsflow from prospective WA SOP producers. Further detail will help reduce risks (particularly around extraction and evaporation), encourage investors, and attract the attention of global fertiliser players. We’ve seen with Danakali (DNK) that value uplift occurs well before production (despite its project location in high-risk Eritrea).

Recent Contacts & Presentations:

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), MZI Resources Ltd (MZI), Seafarms Group Ltd (SFG), Marindi Metals Ltd (MZN), Rift Valley Resources Ltd (RVY), Botanix Pharmaceuticals Ltd (BOT), Thundelarra Ltd (THX), DTI Group Ltd (DTI) OpenDNA Limited (OPN), Metro Mining Ltd (MMI), Tox Free Solutions Ltd (TOX), St George Mining Ltd (SGQ), Venturex Resources Ltd (VXR), Creso Pharma Limited (CPH)

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