Miners set to drag ASX lower as base metals plunge
Published 04-MAY-2017 15:51 P.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
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.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (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 and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.