Australian shares snapped a four-day winning streak on Friday, dragged down by heavyweight miners on China demand concerns, while technology stocks tracked their US peers lower ahead of a widely expected Federal Reserve interest rate hike next week.
The S&P/ASX 200 index closed 0.9% lower at 6,785.70, but rose 1.6% for the week - its best since the week ended Oct. 7.
Miners were the biggest laggards with a 4.5% drop, as iron ore futures tumbled on mounting concerns about global steel demand and China’s economy, which has been hit by COVID-19 curbs and a property sector downturn. Mining giants Rio Tinto, BHP Group and Fortescue fell between 4.4% and 8.2%.
“It’s like companies with exposure to China are being penalised, with investors realigning their portfolios with the priorities of President Xi Jinping and de-risking against companies that have built their business models on heavy selling to China,” said Jessica Amir, a markets strategist at Saxo Markets.
Tech stocks fell 2.2% after the Nasdaq closed lower overnight as investors contended with solid economic data and a mixed bag of corporate earnings.
“The carnage is likely to continue. Plus, there is a lot of risk being taken off the table ahead of next week’s Fed meeting, where a 75 basis-point rate hike is expected,” she said.
Gold stocks fell 1.1%, with bullion prices stuck in a very narrow range ahead of the Fed meeting next week.
Miners, gold stocks push Aussie shares to 1-1/2 month high
Energy stocks slipped 0.5% as oil prices declined after top crude importer China widened its COVID-19 curbs.
Shares of Ampol and Beach Energy were down 1.4% and 0.6%, respectively.
Financials bucked the trend to climb 0.4%, with the big four banks climbing between 0.3% and 0.9%. New Zealand’s benchmark S&P/NZX 50 index closed 0.3% higher at 11,129.53.
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