ASX Declines as Banking Sector Faces Pressure, Mining Stocks Shine

January 10, 2025 02:35 AM AEDT | By Team Kalkine Media

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ASX Declines as Banking Sector Faces Pressure, Mining Stocks Shine — Image source: Shutterstock

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Headlines

ASX slips amid banking sector struggles

Mining and gold stocks offer some stability

US economic data may influence global rates

The Australian share market experienced a decline for the second consecutive day, with the S&P/ASX 200 index closing lower. Despite this, the index managed to secure a modest gain for the week.

The banking sector faced significant challenges as experts anticipated a rate cut by the Reserve Bank of Australia (RBA) earlier than expected. This forecast was influenced by weaker retail sales data, which has added to the speculation surrounding adjustments in monetary policy. Typically, lower interest rates affect the banking sector by narrowing the profit margins on loans, leading to a decline in stock prices for major banks.

Notable among these were Commonwealth Bank (ASX:CBA) and Westpac (ASX:WBC), both experiencing a downturn. Mining stocks, however, provided some balance to the broader index. A rise in iron ore prices bolstered the sector, offering a degree of stability amidst the market's overall dip.

In addition, gold stocks showed resilience, reflecting the ongoing demand for safe-haven assets. Companies like Emerald Resources (ASX:EMR) performed well, contributing to the sector's gains.

Meanwhile, on the international front, attention remained on the upcoming release of US employment data, which could influence monetary policy decisions by the Federal Reserve. This development holds potential implications for global economic trends and market movements.

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