Miners pull Australian shares to near 2-week low as metals rally loses shine
- The benchmark closed 0.7% lower on Friday
Australian shares slipped on Monday to their lowest in nearly two weeks, as heavily weighted miners came under pressure from declines in base and precious metals prices, while investors awaited the central bank’s policy decision later this week.
The S&P/ASX 200 index fell 0.7% to 8,811.10 by 2323 GMT, hitting its lowest level since January 22.
The benchmark closed 0.7% lower on Friday.
The resources sub-index was the major laggard on the main index with a 4.8% drop, after copper prices fell on Friday, iron ore struggled for direction and a rally in precious metals lost steam.
Miners rose 9.7% in January, underpinning the main index’s 1.8% surge. On Monday, BHP was on track for its largest single-day fall in three weeks, while Rio Tinto hit its lowest since January 23.
Among gold miners, Northern Star Resources was on course for its weakest session in 10 months, while Evolution Mining fell to its lowest since January 20.
Energy stocks lost 1.7% as oil prices fell over $1 after US President Donald Trump said over the weekend that Iran was “seriously talking” with Washington.
Index leaders Woodside Energy and Santos declined 0.4% and 0.5%, respectively.
Technology stocks added to the benchmark’s losses, falling in parallel with the tech-heavy Nasdaq Composite’s declines on Friday. Financials were an outlier to advance 1.2%, kicking off the month on a strong footing after a 1.4% fall in January.
The “big four” banks gained between 1.2% and 1.8%.
Data released last Wednesday showed that the country’s underlying inflation ran at a faster-than-expected pace in the December quarter, adding to a recent slew of hot economic data that has raised expectations for a rate hike at the central bank’s monetary policy meeting on Tuesday.
While higher-for-longer interest rates are beneficial for banks’ profitability, they can potentially pressure borrowers’ mortgage-paying capacity.
In New Zealand, the benchmark S&P/NZX 50 index declined 0.4% to 13,372.22.