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Highlights
- ASX marks fourth straight weekly gain amid global trade optimism
- Mining majors support index while critical minerals sector declines
- Ora Banda (OBM) drops after revising gold production outlook
The Australian sharemarket extended its upward momentum, securing a fourth consecutive week of gains as fresh optimism surrounding US-China trade talks buoyed sentiment across key sectors. The positive outlook came after the US President signaled a resumption of trade discussions with China’s President, focusing on critical mineral exports and broader trade dynamics.
Although the S&P/ASX 200 edged 0.3% lower on Friday to close at 8515.7, driven by profit-taking in select sectors, the index still gained 1% over the week, reflecting its continued strength. The broader All Ordinaries also slipped 0.3%, mirroring cautious end-of-week sentiment.
Global Trade Prospects Boost Mining Stocks
The rekindled trade dialogue between the US and China helped ease fears about declining Chinese commodity demand. This led to a lift in commodity-linked sectors, especially iron ore, as futures in Singapore climbed 0.8% to US$95.65 a tonne. In response, major miners rallied: BHP Group (ASX:BHP) advanced 0.7% to $38.23, while Fortescue Metals Group (ASX:FMG) gained 1% to $15.65, aligning with the stronger iron ore price.
However, expectations that China might loosen restrictions on rare earth exports weighed on critical minerals companies. Pilbara Minerals (ASX:PLS) dropped 5.2% to $1.28, and IGO Ltd (ASX:IGO) fell 3.5% to $4.19, reflecting concerns over weaker demand advantages for Australian producers.
This divergence in performance underlines the dynamic nature of the ASX200 index, where sector-specific news can significantly sway investor sentiment.
Broader Market Sentiment and Currency Moves
Investors appeared cautious ahead of the US non-farm payroll data, prompting profit-taking in banks and tech. Commonwealth Bank of Australia (ASX:CBA), a heavyweight in the index, slipped 0.8% to $179.90. The anticipation of potential US Federal Reserve rate moves also weighed on market activity.
Meanwhile, the Australian dollar strengthened to a six-month high of US$0.6537, supported by a weaker US dollar on labour market worries. This currency uptick could impact export-driven sectors going forward.
Key Corporate Movements
In the corporate sphere, Ora Banda Mining (ASX:OBM) fell sharply by 14.1% to $1.10 after revealing that full-year gold output would fall short of previous guidance, owing to operational challenges at its Davyhurst project.
Conversely, Qantas Airways (ASX:QAN) gained 3.5% to $10.76, benefiting from positive market reaction to news surrounding a competitor’s IPO update.
For income-focused investors, recent moves across sectors also offer insights into evolving ASX dividend stocks trends, particularly in light of shifting macroeconomic and geopolitical influences.
