Australian stocks ended lower on Friday, as weak iron ore prices pulled down mining companies, while Rio Tinto shares hit a nearly eight-month low after the global miner flagged dismal second-half earnings.
The S&P/ASX 200 closed 0.7% lower at 6,605.60 points, snapping a three-day run of gains.
The benchmark hit a three-week low during the session and dropped 1.1% for the week.
Miners tumbled 3.4% in their sixth straight weekly loss, tracking a fall in iron ore prices on fears over waning demand for steel in China after the country’s weak economic data.
The sub-index lost 6.6% this week.
New Zealand shares end higher after expected rate hike, Australia stocks rise
Shares of Rio Tinto, the world’s biggest iron ore producer, slipped 2.9% after warning a hit to earnings from COVID-led labour shortages in Western Australia and soaring inflation.
BHP and Fortescue Metals retreated 3.5% and 6.2%, respectively.
Kerry Craig, a global market strategist at J.P. Morgan, noted that supply constraints in commodities are likely to support prices to a degree and that a global recession was not as imminent as many believe.
Financials shed 0.4% and marked their worst day in two weeks.
Westpac Banking and Australia and New Zealand Banking Group declined 0.2% and 1.3%, respectively.
Gold stocks dropped 2.1% to their lowest in 3-1/2 years as fears of aggressive US interest rate hikes weighed on demand for the bullion.
Newcrest Mining and Northern Star Resources lost 2.8% and 2.5%, respectively. Upcoming earnings in the United States and forecast from Australian firms against the backdrop of rising prices were likely to be the dominant drivers of market sentiment in the near future, said J.P. Morgan’s Craig.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 ended 0.6% lower at 11,122.61 points.
Courier services provider Freightways and electricity generator Contact Energy were among the major laggards.
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