Mining Stocks Propel ASX as Tech and Retail Slip

2 min read | October 21, 2024 04:02 PM AEDT | By Team Kalkine Media

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Mining Stocks Propel ASX as Tech and Retail Slip — Image source: Shutterstock

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Highlights

Mining sector leads ASX rise, supported by higher iron ore and gold prices.

WiseTech and Mineral Resources see significant declines due to corporate issues.

Nick Scali reports impact of higher freight rates on profit margins.

Australia's share market experienced a rise on Monday, driven by a recovery in the mining sector following strong Wall Street performance. By early afternoon, the S&P/ASX 200 Index increased by 0.7%, gaining 55.2 points to reach 8338.7, nearing its record high of 8355.9. The materials and healthcare sectors led the gains, buoyed by improved commodity prices and broader market optimism.

The mining sector was a standout performer. A rebound in the price of iron ore and gold helped push the sector higher. BHP (ASX:BHP) and Rio Tinto (ASX:RIO) saw gains of 1.8% each, while West African Resources (ASX:WAF) surged 6.6% and De Grey Mining (ASX:DEG) climbed 3.7%. Iron ore futures in Singapore showed a positive trend, with November contracts rising 1.3% to $103 per tonne.

In contrast, tech company WiseTech (ASX:WTC) faced a sharp decline of 11%. The company is currently reviewing allegations involving its founder and CEO, Richard White. This came after reports revealed White paid millions of dollars to settle a personal legal matter. WiseTech’s board stated that it was seeking further information and taking external advice. Adding to the concerns, White has also been selling down his stake in the company, offloading over 350,000 shares recently.

Another major decliner was Mineral Resources (ASX:MIN), which plunged 11.4%. The company is dealing with a separate issue involving its managing director, Chris Ellison, who is under scrutiny following a report alleging years of tax evasion. The company has hired external legal counsel to investigate the matter, but reassured the market of its confidence in Ellison’s leadership.

Retailer Nick Scali (ASX:NCK) also suffered a 6.2% drop after announcing that higher freight rates would affect its profit margins. In a trading update, the company forecasted that its net profit for Australia and New Zealand would be lower than expected for the first half of the year.

Despite gains in the mining sector, these corporate issues in technology and retail weighed on the broader market's performance.

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