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Highlights
- ASX200 ends winning streak amid global credit concerns
- Mining and energy stocks lead market weakness
- Defensive and gold stocks offer some support
The Australian share market pulled back on Monday, breaking its eight-session winning streak as concerns over US fiscal health spilled into global sentiment. The S&P/ASX200 index slipped 0.2% to 8328.8 points by midday, influenced by weakness in commodity-related sectors.
This downturn was sparked by credit ratings agency Moody’s recent decision to downgrade the US credit rating from AAA to Aa1. The move cited surging fiscal deficits and rising interest obligations in the United States. The fallout from this decision triggered declines in US equity futures and drove a rally in gold prices, as investors sought safer assets.
In Australia, the materials and energy sectors were the primary drags on the market. Iron ore producers fell sharply as prices edged further below the critical US$100 per tonne mark. A slowdown in China’s industrial output and retail sales, though anticipated, added further pressure to the sector given its heavy reliance on Chinese demand.
BHP Group (ASX:BHP) declined 1.8%, while Rio Tinto (ASX:RIO) slipped 1.2%. The coal segment also faced significant declines after New Hope Corporation (ASX:NHC) downgraded its production and sales guidance, resulting in a sharp 7.1% drop in its share price. Whitehaven Coal (ASX:WHC) fell 3.1% in tandem.
Elsewhere, Mineral Resources (ASX:MIN) shed 5.9%, despite announcing a leadership change as its long-standing chairman prepares to exit in July. Gentrack Group (ASX:GTK) also saw a 6.1% drop, even though its net profit for the half-year rose over 30%, aided by recurring revenue growth and currency gains.
Domino’s Pizza Enterprises (ASX:DMP) lost 2% after announcing the resignation of its Australia and New Zealand business head. In contrast, Lendlease Group (ASX:LLC) gained 1.4% following confirmation of a new UK joint venture with The Crown Estate.
Despite broader weakness, defensive sectors such as utilities and communications helped cushion the decline. Gold stocks also stood out, with Evolution Mining (ASX:EVN) and Northern Star Resources (ASX:NST) rising 2.9% and 1.7% respectively, tracking the rally in gold prices.
For investors monitoring income-generating opportunities, segments within the utilities and resources space remain notable among key ASX dividend stocks. As the broader ASX200 chart navigates global headwinds, market rotation into more defensive assets continues to unfold.
