Weekly Wrap: Rising Tides Can’t Lift All Boats: ASX Faces Setbacks Amid Commodity Declines
The Australian share market ended the week on a softer note, unable to shrug off the downside of lower iron ore prices and a lower gold price.
By the close of trade the ASX 200 had shed 42.5 points, or 0.5%, to 8666.9 after failing to follow Wall Street’s slender tech-led positive lead.
Iron ore futures in Singapore fell 1.9% to $US103.10 a tonne as the market digested signs of oversupply after record shipments from Australia’s major bulk export terminal at Port Hedland.
Weaker Chinese steel production no longer seems capable of soaking up record seaborne iron ore supply, so the share prices of Australia’s big miners weakened.
BHP (ASX: BHP) fell 1.9% to $40.80, Fortescue (ASX: FMG) lost 3.4% to $18.35, and Rio Tinto (ASX: RIO) lost 0.8% to $118.86.
Banks also weaker
The market was also hit by weakness in the banking sector amid signs that the record-breaking run of Commonwealth Bank shares (ASX: CBA) is suffering from profit-taking.
All four big banks were weaker with ANZ (ASX: ANZ) the hardest hit with an 0.75% fall to $30.22.
Gold miners were also mostly weaker, as traders increasingly concluded that the US Federal Reserve would keep monetary policy on hold for now, putting downward pressure on the gold price.
Northern Star (ASX: NST) came off 2.8% to $15.81, Evolution (ASX: EVN) fell 3.2% to $7.30, while Perseus (ASX: PRU) lost 2.5% to $3.56.
Pulling against the trend were shares in Newmont (ASX: NEM) which rose 3.8% to $95.38 after reporting a higher than expected quarterly adjusted net income of $US1.6 billion.
Oils stocks rise
Oil prices were higher on the back of greater US trade optimism before next week’s deadline and that showed through with Woodside Energy (ASX WDS) rising 3.7% to $26.20 and Santos shares (ASX: STO) up 1% to $7.78.
Some staff movements helped to move share prices around with the move of Qantas executive Carla Webb-Sear to become KMD Brand’s (ASX: KMD) Chief Financial Officer, boosting shares by 4.4% to 24¢.
The retirement of Steadfast Group’s (ASX: SDF) long-serving chief financial officer Stephen Humphrys at the end of August saw shares fall 1.5% to $5.82.
A 7% lift in funds under management for the June quarter helped to produce a 9% rise in Regal Partners (ASX: RPL) shares to $2.90 after the investment manager reported a 7 per cent lift in funds under management for the June quarter.
The week ahead
In Australia the big thing to look out for in the coming week is the release of inflation figures – especially the Reserve Bank’s preferred measure of core inflation – the trimmed mean consumer price index.
It is expected to come in around 0.7% for the June quarter, with the annual growth rate easing to 2.8%, which should be enough to guarantee a decrease in the cash interest rate when the RBA board meets in August.
It is a different picture in the US where tariff increases are starting to boost inflation numbers, leading to another likelihood of a hold in official interest rates there.
The other big news for the coming week is the release of earnings results for some of the big US megacap technology stocks, including Meta, Microsoft, Amazon, and Apple.