Morning Notes

19/04/2017 Argonaut Morning Note

Market Update & Important Indicators:

Major stock indexes fell intraday, weighed by a slide in shares of banks and health-care companies. Investors have backed away from stocks in recent weeks while picking up government bonds as tepid economic data, as well as flaring political tensions around the world, stoked demand for haven assets. A series of disappointing earnings reports contributed to the retreat in stocks, investors and analysts said. With investors' expectations for pro-growth policies from the Trump administration waning, many say continued signs of corporate health will be key to stocks moving higher. The Dow Jones Industrial Average lost 124 points, or 0.6%, to 20512 intraday. The S&P 500 fell 0.3% and the Nasdaq Composite lost 0.3%. The U.S. gold price rose again overnight, jumping 0.4% at 1,289.20 US$/oz. Bank stocks slid after a disappointing earnings report from Goldman Sachs Group, whose first-quarter trading results fell short of those posted by its rivals. The KBW Nasdaq Bank Index of leading U.S. commercial lenders lost 0.9%.

European stocks moved sharply lower, with U.K. stocks leading the charge south after U.K. Prime Minister Theresa May unexpectedly called an early general election. A slump in commodity shares and nerves ahead of the first round of voting in France's presidential election on Sunday also added selling pressure on European equity benchmarks. The Stoxx Europe 600 index slid 1.1% to close at 376.35, marking its biggest one-day percentage drop since Nov. 2, according to FactSet data. Trading was closed Monday for the Easter holiday. Last week, which was shortened by the Good Friday holiday, the regional benchmark fell 0.2%, its first pullback in three weeks.

In Asia, the Shanghai Composite Index closed down 0.79% after dropping in late trading. The index fell by 1.6% across Friday and Monday, in its largest two-session drop since December. In Hong Kong, the Hang Seng also closed down, by 1.39%. Elsewhere in Asia, Japan's Nikkei picked up, closing 0.35% higher. Bourses in Korea and Taiwan rose too, with the Kospi and Taiex up 0.13% and 0.31%, respectively. Meanwhile, Indonesian shares end higher, despite rising political temperature ahead of an election this week in the nation's capital. The JSX index edged up 0.5% to 5606.52, with 155 gainers and 152 decliners. The local bourse will be closed Wednesday on account of elections to the post of governor. Thailand shares ended relatively flat, as investor sentiment remained weak on geopolitical issues. The SET Index closed 1.49 points lower at 1574.42.

Australian shares slumped to three-week lows, continuing a selloff that paused over the four-day Easter weekend. A drop in materials stocks following lower iron-ore prices helped drive a broad decline, while telecommunications stocks notched sharp losses as Telstra continued to pull back on worries about heightened competition for the country's largest telecoms firm. Dovish comments from the Reserve Bank of Australia did nothing to help restore investor confidence, highlighting the central bank's concerns about employment and rising household debt. The S&P/ASX 200 lost 53.2 points, or 0.9%, to settle at 5836.7.

The London Metal Exchange's three-month copper contract closed down 2.0% at $5,572/t. All other base metals finished lower on Tuesday. Aluminium prices fell 0.8% at 1,876/t, nickel prices fell 4.5% at 9,256/t, lead prices fell 7.0% to 2,099/t, tin prices fell 1.5% at 19,459/t and zinc prices fell 4.1% at 2,504/t.

Recent Contacts & Presentations:

Metro Mining Ltd (MMI), Tox Free Solutions Ltd (TOX), St George Mining Ltd (SGQ), Venturex Resources Ltd (VXR), Creso Pharma Limited (CPH), Sino Gas & Energy Holdings Ltd (SEH), Orecorp Limited (ORR) Doray Minerals Limited (DRM), Capricorn Metals Ltd (CMM) Independence Group (IGO), Cardinal Resources Limited (CDV), Metal Bank Ltd (MBK), MOD Resources Ltd (MOD) Quintis Ltd (QIN), Regis Resources Ltd (RRL), Apollo Minerals Ltd (AON), Ironbark Zinc Ltd (IBG), Sovereign Metals Ltd (SVM), Pilbara Minerals Ltd (PLS), Laconia Resources Ltd (LCR), Hazer Group Ltd (HZR), Transerv Energy Ltd (TSV), Ausquest Ltd (AQD), Quintis Ltd (QIN), Paradigm Biopharma Ltd (PAR)

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