Australian shares tread water as miners offset gains in banks; market eyes ceasefire talks

Australian shares struggled for momentum on Thursday, as losses in heavyweight miners and gold stocks countered gains in financials, while investors awaited Iran’s response to a US ceasefire plan.

The S&P/ASX 200 index was 0.1% up at 8,541.6 points as of 0005 GMT.

The benchmark closed 1.9% higher on Wednesday.

Markets struggled for direction as investors awaited stability in the Middle East, with Iran reviewing a US proposal to end the war. However, the Iranian Foreign Minister said on Wednesday that Tehran has no intention of holding talks to end the conflict.

Reserve Bank of Australia Assistant Governor Christopher Kent warned on Thursday that prolonged conflict in the Middle East will cause greater economic damage.

Policymakers need to ensure a surge in energy prices will not dislodge inflation expectations, he added.

The RBA has hiked its rates for a second straight meeting this month as inflation overstayed its welcome.

Investors expect a nearly 60% chance of a central bank rate hike to 4.35% at the May monetary policy meeting, with rates as high as 4.75% by year-end.

On the bourse, miners fell 0.4%, hurt by lower iron prices, due to fears of production cuts in China’s steelmaking hub of Tangshan.

Weighing on heavyweight miners, gold stocks slid 1.7%, with Ramelius Resources falling 1.5%.

However, mining behemoths Rio Tinto and BHP rose 0.4% and 0.3%, respectively. Financials gained 0.5%, with three of the “big four” banks rising between 0.5% and 0.9%.

Energy stocks inched 0.7% higher, even as oil prices dropped nearly 2% on Wednesday.

Energy producer Woodside Energy and Yancoal Australia advanced 0.9% and 1.6%, respectively.

Local tech stocks fell 1.9%, on track for their steepest fall since March 19.

Sector majors Wisetech Global and Xero lost 1.9% and 2.8%, respectively.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.8% to 13,034.41 points.