Miners set to drag ASX lower as base metals plunge

Published at May 4, 2017, in Features

While there weren’t any significant moves overnight in global markets, the trend was generally negative, particularly in Europe where there were ructions between European Union countries and the UK regarding the Brexit issue.

In the US, the Dow struggled to find direction, spending most of the day in negative territory before edging above the previous close with a gain of eight points to finish at 20,957 points.

As expected, the Fed Reserve meeting was for the best part a non-event with monetary policy remaining unchanged and commentary surrounding rates consistent with prior rhetoric.

After shedding approximately 40 points in early trading the NASDAQ finished down 0.4% at 6072 points.

Similar to the Dow, it was a late rally that softened a negative performance from the FTSE 100 as it closed down 0.2% at 7234 points. Downward pressure was exacerbated by poor performances from mining companies.

The Paris CAC 40 was relatively flat at 5301 points. However, there was more confidence in German markets with the DAX rallying nearly 0.2% to close at 12,527 points.

On the commodities front, oil continued its downward trend, falling another 0.2% to close at US$47.55 per barrel.

Gold was sold down substantially as it crashed through the US$1250 per ounce level where there tended to be a degree of support to close at US$1238 per ounce, representing a decline of 1.5%.

There were also sharp declines in base metals with copper sold off heavily as it plunged more than 3% to close at US$2.51 per pound.

Nickel fell nearly 3% from US$4.29 per pound to US$4.17 per pound.

Zinc closed at US$1.16 per pound, representing a fall of 2.7%. Lead declined circa 3% to close at US$1.00 per pound.

Falls across precious and base metals suggest it could be a tough day for mining companies, which also placed a drag on the index on Wednesday.

The other flow on effect when there is a significant fall in metals prices is downward pressure on the Australian dollar, and last night’s close of US$0.742 represented a four month low.

Furthermore, technical analysts are of the view that it has breached a level of support which could see it trend down towards US$0.72.

Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!