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US Market finishes higher; BHP set to pay for Samarco Mine damages

US Market finishes higher; BHP set to pay for Samarco Mine damages
Dec 23, 2015 By Imran Valibhoy

The US stock market edged slightly higher upon closing of yesterday’s trading, with the Dow Jones Industrial Average up 165.65 points, or 0.96%, to 17,417.27 points. The broader S&P 500 also gained 17.82 points, or 0.88%, to 2,028.97 points. Similarly, the NASDAQ added 32.19 points, or 0.65%, to 5,001.11 points.

The gains in the US market yesterday were supported by positive US GDP and Inflationary data, along with a 0.9% recovery in crude oil prices, which coincided with the SPNY (S&P energy sector index) adding 1.4%.

The recent positive chain of US economic data has reaffirmed the view that the Federal Reserve may continue their gradual tightening of US interest rates.

In Europe, the FTSE 100 in London finished 0.8% higher, to 6,083.10 points. In contrast, the German DAX closed 0.1% lower, to 10,488.75 points. Similarly, after having initial gains at the open of trading, the STOXX 600 was down 0.1%, to 356.87. However, the Spanish IBEX 35 slightly recovered 0.5%, to 9,415.60, after contracting 3.5% at the close of the previous trading session, following the spark of political instability within the Spanish parliament.

Great Britain 3Q GDP is set to be released today, with forecasted 2.4% growth (year-on-year). This may act as a general indicator on whether the Bank of England will continue with their accommodative monetary policy.

In Australia, the ASX S&P 200 finished higher at the close of trading, gaining 0.1%, to 5,116.7 points.
Despite the ongoing rout in oil prices, major oil miners, such as Santos (ASX:STO) gained 3%, to $3.71, along with Woodside (ASX:WPL), which was up 0.6%, to $27.30, and Oil Search (ASX:OSH), which finished 0.8% higher, to $6.15.

The big 4 banks all dropped, upon the close of yesterday’s trading, with ANZ losing 0.4%, to $26.68, CBA down 0.3%, to $81.67, NAB down 0.1%, to $28.78, and WBC losing 0.8%, to $32.

Iron ore mining giants BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) each lost 1.7% and 1.5% respectively. BHP recently updated its investors on the Samarco Mine disaster, with the main highlight being that BHP, Vale and Samarco, upon the request of the Brazilian government, are to create a fund, worth $US5.2 billion, in order to pay for the damages.

Origin Energy (ASX:ORG) lost 1.8%, to $4.38, upon the close of yesterday’s trading, after announcing to its investors that the company attempts to protect itself from the rout in crude oil prices, by paying $82 million for put options.

However, Crown Resorts (ASX:CWN) finished 1.3% higher, to $12.24, following considerations that James Packer is going to privatise the casino operator.

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Imran Valibhoy Author: Imran Valibhoy Dec 23, 2015

Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.

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