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Highlights
- ASX slips as BHP and Paladin Energy stocks retreat.
- Commodities like iron ore and gold see further declines.
- Energy and gold stocks suffer as demand concerns rise.
The Australian stock market continued its decline, with the S&P/ASX 200 Index dropping by 10.6 points to settle at 8255.6 points, following a prior decrease of 0.4 percent on Monday. This drop was largely driven by falls in iron ore, gold, and oil prices, which impacted mining and energy stocks across the board. Key mining shares declined 1.4 percent, with ASX:BHP falling 1.8 percent to AUD 40.90 due to a 2 percent reduction in iron ore prices, which are now around USD 100 per tonne.
Ongoing market adjustments in response to China’s recent stimulus measures, perceived as falling short of expectations, compounded the pressure on commodity prices. Further uncertainties loom around potential tariffs from the incoming US administration, affecting investor sentiment. Commonwealth Bank’s commodity strategist, Vivek Dhar, suggested that iron ore prices could see additional declines in the near term, pointing to a cautious outlook on steel demand. However, he noted that Chinese policymakers may still enact further stimulus, potentially awaiting clearer signals on US trade tariffs.
ASX-listed energy stocks also experienced setbacks, declining by 1.6 percent amid lower coal and oil prices driven by reduced demand from China. Brent crude held its position after a significant drop, nearing USD 72. Similarly, spot gold prices dipped by 2.4 percent to roughly USD 2617 per ounce, resulting in a decline among gold mining stocks. Companies such as West African Resources, Emerald Resources, and Bellevue Gold saw their shares fall by approximately 5 percent, marking them as some of the weakest performers on the ASX 200.
Uranium stocks were also hit hard, with ASX:PDN (Paladin Energy) plunging by 28.9 percent to AUD 6.88 after revising its production forecast, citing operational issues at its Langer Heinrich mine in Namibia. Other uranium companies, including Deep Yellow and Boss Energy, also recorded losses of 6.9 percent and 4.5 percent, respectively.
On the upside, lithium-focused ASX:LTR (Liontown Resources) rose by 4.2 percent to AUD 0.875, despite facing a recent downgrade over balance sheet concerns. In the tech sector, ASX:SQ2 (Block Inc.), the parent of Afterpay, surged by 10.7 percent to AUD 126.40, tracking gains on its US-listed shares after a favorable analysis of its latest earnings report.
Financial and management sectors also faced challenges. ASX:PTM (Platinum Asset Management) saw a minor dip of 0.9 percent to AUD 1.16 after shareholder dissatisfaction with the 2024 remuneration report, resulting in a second consecutive negative vote. Additionally, ASX:NHF (NIB Holdings) cut its guidance, anticipating an operating loss due to increased claims in New Zealand, pushing shares down by 0.7 percent to AUD 5.96.
