Oil plunges while base metals rally
With little new economic data surfacing overnight, it was once again the sharp decline in the oil price that proved to be the catalyst for falls across most global indices.
The performance of the NASDAQ when compared with the Dow clearly illustrated the ‘what’s hot and what’s not’ state of the market.
The Dow shed 57 points or 0.3% to close at 21,410 points, predominantly weighed down by energy stocks within the index, while the tech heavy NASDAQ gained 0.7% to close at 6233 points.
In the UK, the FTSE 100 came off 0.3% to close at 7447 points. There were similar proportionate losses in mainland European indices with the DAX and the Paris CAC 40 both declining circa 0.3% to close at 12,774 points and 5274 points respectively.
Notable declines in the energy space included oil producers such as Royal Dutch Shell Plc (-1.3%) and BP plc (-0.7%).
Services companies also felt the brunt of plunging market sentiment towards the sector, typified by the sharp fall of more than 3% in Caterpillar Inc.
The quantum of the fall in the oil price is now looking disturbing, having fallen nearly US$10 per barrel in the last month, and as the following chart demonstrates it has now crashed below the US$43 per barrel mark for the first time since January 2016.
Base metals stage a rebound
Elsewhere on the commodities front, things were generally brighter with gold up slightly to US$1247 per ounce.
Similarly, iron ore edged up 0.7% to US$56.82 per tonne.
The most notable gains were in the base metals space with a particularly strong performance from zinc as it gained 3.3% to close just shy of US$1.20 per pound, which would represent a near 60 day high.
Nickel continued its rollercoaster up one day, down the next trend, but last night’s gain was one of its more convincing rallies in the last month as it surged more than 2% to close at US$4.06 per pound, its highest level for June.
Copper rallied 1.5% to US$2.59 per pound, its most convincing one-day game since early June.
There was also a substantial spike in the lead price as it gained approximately 2.5% to close just shy of US$0.98 per pound.
The Australian dollar is fetching US$0.755.
This article is General Information and contains only some information about some elements of one or more financial products. It may contain; (1) broker projections and price targets that are only estimates and may not be met, (2) historical data in terms of earnings performance and/or share trading patterns that should not be used as the basis for an investment as they may or may not be replicated. Those considering engaging with any financial product mentioned in this article should always seek independent financial advice from a licensed financial advisor before making any financial decisions.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Longhou Capital Markets Pty Ltd (AFSL No. 292464). 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.
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.