On January 17, 2018, we saw ASX trending lower owing to miners that were a drag with iron ore slipping low and tipped for a downfall to $50 a metric ton. This picture has been laid down by market experts given the piling supplies at ports with China, the top importer of the commodity slowing down in terms of growth. The market is strong in its view on a bearish commodity scenario building up at the back of near-term sell-off, with recovery expected in second half of the year after a steep fall. The scenario is further weighed towards lower mill profitability in China.
Not just the iron ore, base metals were seen to be on the slipping side as copper and nickel touched low levels while US dollar strengthened a bit. Copper on the London Metal Exchange was down 1.8% at $US7,078 a tonne while nickel plunged 2.4% at $US12,550.
Overall, miners were seen on the losing side with BHP Billiton plunging 2.9%, Rio Tinto dropping by 3.5%, and South32 slipping by 1.5%. Even Lithium Miners touched low levels with Galaxy Resources plunging by about 4.5%.
On the other hand, and on a positive side, Australian consumer sentiment was reported to be again up in January post the December rise and touched the highest level in four years. The data from the Melbourne Institute and Westpac Bank survey indicated that index of consumer sentiment has been up 1.8% in January from December and is indicative of an emerging trend that households are now seen to be on a spending spree with a positive view on economic state given the interest rates and job statistics. This seems to change the long-lasting trend reaching its peak in 2017 September quarter; and along with improving retail sales, sets a better outlook for next few years.
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