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US Market Gains; Australian Miners Slump as Oil is on the Decline

US Market Gains; Australian Miners Slump as Oil is on the Decline
Jan 13, 2016 By Imran Valibhoy

US Market in the Green

The US market finished in the green for the second day in a row, upon the end of overnight trading, following the gains made in the Chinese markets.

The Dow Jones Industrial Average added 117.65 points, or 0.7%, to 16,516.22 points. Likewise, the S&P 500 gained 15 points, or 0.8%, to 1,938.68 points. Similarly, the NASDAQ Composite added the most, where it gained 47.93 points, or 1%, to 4,685.92 points.

With China having a relatively positive trading session, along with a gain in the Chinese Yuan, US investors seemed to be calmer this trading session. The majority of the gains in the market were from the technology and healthcare sector.

Crude Continues its Declines

WTI Crude continued its slump for 2016, upon the gains in the USD, along with ongoing concerns that demand in China, made Crude lose 2.20%, to $US30 barrel. This is the lowest Crude Oil has been for over 12 years.

With OPEC not being able to agree on a production limit, Geopolitical tensions between Saudi Arabia and Iran, along with the prospect of slowing demand within China, it is likely that the ongoing pressure on the oil price will continue for the year 2016.
Chinese Sell-Off Eases

The Chinese sell-off that plagued investors globally has eased upon the end of yesterday’s trading session, in reaction to the rise in value of the Yuan.

The Shanghai Composite added approximately 6.16 points, or 0.2%, to 3,022.86 points. The relative calm continued, with the CSI 300 gaining around 23.2 points, or 0.7%, to 3,215.71 points.

However, the Japanese Nikkei 225 finished 479 points, or 2.2% lower, to 17,218.96 points, upon the conclusion of yesterday’s trading. Losses were particularly felt in the mining sector, which fell over 5%, in reaction to the dampening of the oil price.

Europe Finishes Higher

Despite the continued decline in the oil price, most European indices finished in the green, at the conclusion of overnight trading. The German DAX added 160 points, or around 1.6%, to 9,985.43 points. In similar fashion, the London FTSE 100 finished 57 points, or approximately 0.9% higher, to 5,929.24 points. The European Stoxx 600 finished 0.9% higher.

ASX: Mining Shares Slump

The ASX finished slightly lower, upon the end of yesterday’s trading, losing approximately 7 points, or 0.1%, to 4,925.13 points.

However, the major mining shares felt the ramifications of falling commodity prices in yesterday’s trading session. Iron ore miners BHP Billiton and Rio Tinto fell 3.4% and 3.3%, to $15.01 and $39.15 respectively. This is an 11 year low for BHP, who has fell over 40% in the past year, amongst the decline in commodity prices.

Oil miners Santos and Woodside Petroleum continued their slump, falling 8.1% and 1.9%, to $2.95 and $27.08 respectively.

However, one of the biggest for the winners for the day was Qantas, which gained 2.3%, to $4.07, in response to the dampening in the oil price.

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Imran Valibhoy Author: Imran Valibhoy Jan 13, 2016

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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