Afternoon Market Report (17:00 AEST)
The local stock market has closed above the 5000 mark, albeit by a modest margin, after several days of commodity induced weakness. The ASX200 rose by one per cent, although mining and energy stocks remained on the outer with investors, being the only 2 sectors to end the session in the red.
Gold prices have been able to consolidate in the last day after a wave of selling over the last week. Even though the selling pressure on the yellow metal has eased, miners of the yellow metal have struggled to get traction on Wednesday. Newcrest Mining (NCM) was one of the only stocks in the group to end higher, closing at $17.10, a gain of 10 cents or 0.58%
Even though market sentiment has stabilised, buyers shunned the resource sector as investors remain wary of the medium term prospects for miners. This notion was exacerbated by the IMF which downgraded global growth forecasts in the last day. The IMF has lowered its global growth forecasts to 3.3pct in 2013, down by 0.2pct compared to its January 2013 estimates. The global economy is expected recover in 2014, expanding by 4.0pct.
BHP announced strong iron ore numbers in its quarterly production report on Tuesday. Iron ore production rose by 6% over the last year hitting record levels over the quarter despite weather related issues. Shares for the leading miners remained in the red on Tuesday as investors continue to dwell on the weaker growth pulse seen globally over the last month. Predictions of substantially lower commodity prices in the medium term continue to inform the fact that mining stocks remain in a convincing down trend despite a consolidation of sorts in recent weeks
In Europe tonight the focus will be on the minutes of the last policy meeting at the Bank of England. Attention will be paid to the vote on asset purchases as an indication of whether the central bank will expand its QE program in the near term to add further stimulus to the UK economy or put another way, print more money.
In the US the Beige Book will be released. This is the survey of economic activity across the 12 US Federal Reserve districts. The report will provide colour on economic conditions through late March and early April and likely support economic softening that has been represented by recent official data.
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