Morning Notes

16/03/2017 Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks extended gains after the Federal Reserve decided to raise interest rates. Stock gains were broad, with all but one of the S&P 500 sectors up after Fed officials indicated they still expect to raise short-term interest rates three times this year. With investors already anticipating Wednesday's rise, several said they were analysing the central bank's plans for future rate increases, its assessment of the economy and any hints about its balance sheet plans. Stock investors had been calm in the lead-up to the meeting, even as ultralow interest rates have underpinned stock markets in recent years. Many have viewed rising rates as a sign of economic strength, amid fresh hopes for tax cuts and increased government spending under the Trump administration. Remarks by central bank officials in the weeks leading up to the Fed meeting largely centred on how the case for raising rates had become more compelling in light of economic strength. That had sparked concern among some investors who worried the Fed may be more aggressive and raise rates four times in 2017. Gold prices rose to a one-week high after the Federal Reserve raised short-term interest rates and kept the outlook for additional rate increases this year unchanged. The U.S. gold price finished up 1.8% at 1,219.70 US$/oz.

European stocks logged modest gains, helped by advances for energy shares as oil prices were in recovery mode. The results of the Dutch election and the Federal Reserve's policy meeting also weighed on investors' minds. The Stoxx Europe 600 index ended 0.4% higher at 375.10, rebounding from a 0.3% loss on Tuesday. The European oil-and-gas index moved up 1.1% as oil prices gained ground after industry group American Petroleum Institute late Tuesday reported a decline in U.S. crude supplies. Oil prices slid earlier on Tuesday after a monthly OPEC report showed an increase in U.S. and Saudi Arabian crude output in an already oversupplied global market.

Shares in Asia mostly inched lower, echoing Tuesday's modest decline on Wall Street. Analysts said many investors were refraining from big bets, with Japanese trading volumes subdued in recent sessions, ahead of the Fed decision and meetings of the Bank of Japan and Bank of England on Thursday. Japan's Nikkei Stock Average and Hong Kong's Hang Seng Index fell just under 0.2% as oil companies reacted to earlier falls in crude futures.

A rally by mining stocks helped drive a late recovery in Australia stocks on Wednesday. That move was pushed by higher iron-ore futures, and after spending much of the day in the red the S&P/ASX 200 finished up 0.3% at 5774. There were mixed results from the sectors, utilities gained most substantially whilst health care was the worst performed this session. The Australian dollar also appreciated against most of the foreign currencies with the exception of the British pound.

The London Metal Exchange's three-month copper contract closed up 0.76% at $5,864/t. The other base metals were mixed on Wednesday. Aluminium prices rose 1.5% at 1,874/t, lead prices rose 1.0% at 2,232/t, and zinc prices rose 2.1% at 2,789/t. Falling for the day, nickel dropped 0.3% at 10,144/t whilst tin fell 0.5% at 19,930/t.

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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