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Market report: Wednesday, November 18


UPDATED: The Australian share market is lower at noon, dragged back by the big miners after fresh falls in commodity prices.

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Prices for gold, silver and copper all fell overnight while oil was off by more than 1 per cent.

The China port price for iron ore, Australia’s biggest export, was flat at $US47 a tonne.

At noon, BHP Billiton was down 2.6 per cent ahead of its annual general meeting in Perth on Thursday where the global miner is expected to be quizzed on its dividends policy and the Samarco mine disaster in Brazil.

All the major gold miners were down by as much as seven per cent after a stellar run by that sector, with investors initially piling into the defensive stock as the Paris terror attacks created uncertainty.

The big banks were weak.

At 8.37am (AEDT) on Wednesday, the local unit was trading at 71.19 US cents, up from 70.84 cents on Tuesday.

The Australian market looks set to open lower after Wall Street lost its previous session’s gains following a report that a soccer match between Germany and Netherlands was called off due to concerns of a bomb attack.

And the Australian share market looks set to open lower after Wall Street lost its previous session’s gains following a report that a soccer match between Germany and Netherlands was called off due to concerns of a bomb attack.

The December share price index futures contract was down 24 points at 5,100.

Locally, in economic news on Wednesday, the Reserve Bank of Australia Assistant Governor (Financial Markets) Guy Debelle and federal treasurer Scott Morrison are slated to attend the Bloomberg Summit in Sydney.

Meanwhile, the Australian Bureau of Statistics’ wage price index for the September quarter and the Westpac-Melbourne Institute Leading Indexes of Economic Activity are due out.

In equities news, Orica is expected to post full year results and AusNet Services to release its half-year results.

Drillsearch, Senex Energy, Seven Group Holdings, Cabcharge, DUET Group, Viralytics and McPherson’s have annual general meetings, as do Virgin Australia, South32 and Cash Converters International.

NEW YORK – US stocks erased gains on Tuesday after a report that a soccer match between Germany and Netherlands was called off due to concerns of a bomb attack.

All three major US indexes had been in positive territory following upbeat earnings reports from Wal-Mart and Home Depot but they quickly gave up those gains after a German official said on television that the match was canceled after information that a bomb attack on the stadium in Hanover was planned.

LONDON – Major European stock markets have posted sharp rises, mirroring earlier Asian gains, as investors continue to show resilience after the deadly terror attacks in Paris.

“It’s clear that, at least for now, the majority of stocks globally remain unfazed by last week’s terrorist attacks in Paris,” said analyst Tony Cross at traders TrustNet Direct.

“Markets held up impressively well in the immediate aftermath of the Paris attacks and the worst weekly decline since August,” added CMC Markets analyst Jasper Lawler.

“The thinking goes that, if markets do not go down after a big weekly drop and a terrorist attack, then the only alternative must be to go up.”

Meanwhile, Britain has marked two consecutive months of falling consumer prices for the first time on record in October, but economists say the bout of mild deflation is likely to end in the next few months.

WASHINGTON – US consumer prices have gained in October with key elements like health care and housing costs pushing higher, hinting inflation could be picking up.

PARIS – Additional spending on security in the wake of the Paris terror attacks means that France will not be able to meet its EU budget obligations, Prime Minister Manuel Valls says.

HONG KONG – Most Asian stock markets advanced strongly, mirroring rallies in Europe and New York as the initial shock from the deadly Paris attacks wore off.

“Good gains in overnight US markets should wash across” into Asia, said Tony Farnham, a strategist at Patersons Securities in Sydney. “Initial cautiousness has quickly dissipated”.


World oil prices have dropped after Monday’s one-off gain as supply forces continues to dominate the market.

Moderate US autumn temperatures have raised expectations for another increase in US commercial crude stockpiles in the country, keeping the downward pressure on prices, while another rise in the US dollar has crimped trade.

After gains on Monday, the first trading day after the deadly attacks in Paris, “we’re back on the supply side of the picture, we’re seeing a stronger dollar as well,” said Matt Smith of ClipperData.

“Today, traders are realising that fundamentally nothing has changed,” said Gain Capital analyst Fawad Razaqzada adding that French bombardment of IS (Islamic State) targets was mainly away from most major oil terminals “and therefore they are unlikely to cause any actual disruptions to supply”.


Gold prices have fallen more than one per cent to the lowest price in nearly six years, pressured by expectations that the United States will raise interest rates in December, and as the US dollar rose and stocks rebounded from losses suffered after Friday’s attacks in Paris.

The other precious metals followed gold down, with silver dropping for the fourteenth straight session to a two-and-a-half-month low and platinum tapping a seven-year low.

“The euro’s on the defensive, the equity markets have done okay and (there are) expectations of a rate rise,” said James Steel, chief metals analyst at HSBC Securities in New York.

“If inflation starts picking up, the Fed will be feeling a lot more stable with their future rate hike approach,” Ava Trade analyst Naeem Aslam said.

“The US rate hike is still the major denominator for the gold price.”


Copper prices have touched their lowest levels in more than six years as fears about demand growth in top consumer China and a higher US dollar fuel negative sentiment.

Copper demand growth in China, which accounts for nearly half of global consumption estimated at about 23 million tonnes this year, has slowed significantly as industrial and construction activity has dwindled.

“It’s hugely sentiment-driven at the moment,” Capital Economics commodities economist Caroline Bain said.

“It’s not a rosy outlook, but neither is it cataclysmic. I do feel it is an overreaction, but I also would be very reluctant to say when it will stop because there is momentum and it can become quite self-fulfilling.”


Dow Jones 17489.50 6.49
S&P500 2050.44 -2.75
Nasdaq 4986.02 1.40
FTSE100 6268.76 122.38
DAX 10971.04 257.81
Shanghai 3758.39 -5.74
Hang Seng 22264.25 253.43
NIKKEI225 19630.63 236.94

0.6686 EUROS
0.4678 UK POUNDS

Gold $US/oz -15.00 1068.60
Copper $US/tonne -0.0115 2.1040
Iron ore $UStonne -2.16 45.58

WTI -1.07 40.67
Brent Crude -0.99 43.57


CAB – CABCHARGE: Cabcharge has its annual general meeting.

CCV – Cash Converters International: Cash Converters International has its AGM on Wednesday.

DLS – DRILLSEARCH: Drillsearch has its annual general meeting.

DUE – DUET GROUP: DUET Group has its annual general meeting.

MCP – MCPHERSON’S: McPherson’s has its annual general meeting.

S32 – SOUTH32: South32 has its annual general meeting.

SVW – SEVEN GROUP HOLDINGS: Seven Group Holdings has its annual general meeting

SXY – SENSEX ENERGY: Senex Energy has its annual general meeting

VAH – VIRGIN AUSTRALIA: Virgin Australia has its AGM.

VLA – VIRALYTICS: Viralytics has its annual general meeting.


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