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Australian shares traded lower on Monday, primarily impacted by declines in the mining and energy sectors. The S&P/ASX 200 index (.AXJO) was down nearly 0.4% at 8,062.90 points as of 0055 GMT, with the majority of sectors in the red. This follows a 0.6% gain on Friday, reflecting a shift in market sentiment.
Investors are keenly awaiting the release of the country's second-quarter GDP report, which is anticipated later this week. The data is expected to provide crucial insights into the economic growth outlook and could influence the Reserve Bank of Australia’s (RBA) interest rate decisions during their upcoming meeting.
Economic indicators from the United States have also contributed to the cautious mood in global markets. Recent data suggests that the Federal Reserve is likely to implement a smaller rate cut of 25 basis points rather than the previously anticipated 50 basis points. This shift in expectations has had a ripple effect on international markets, including Australia.
In the U.S., the Dow Jones Industrial Average (.DJI) rose by 228.03 points, or 0.55%, to 41,563.08 points on Friday. The S&P 500 (.SPX) increased by 56.44 points, or 1.01%, and the Nasdaq (.IXIC) gained 197.19 points, or 1.13%. Despite these gains, Australian markets were weighed down by sector-specific declines.
In Sydney, gold stocks (.AXGD) experienced a notable decline, falling as much as 3% due to a slump in bullion prices. Northern Star Resources (ASX:NST), the country’s largest gold miner, saw its shares drop by more than 2%. Additionally, Australian miners (.AXMM) shed approximately 0.8%, influenced by weaker iron ore prices in China, a major steel producer. Sector giants BHP Group (ASX:BHP) and Rio Tinto (ASX:RIO) saw their shares decline by 0.4% and 0.7%, respectively.
Other sectors also faced losses, with healthcare (.AXHJ) and technology (.AXIJ) trading down by 0.5% and 0.6%, respectively.
In corporate news, retailer Endeavour Group (ASX:EDV) saw a decline of up to 2.3% following Woolworths (ASX:WOW) divesting its remaining stake in the company for AU$383 million. This move contributed to the negative sentiment surrounding retail stocks.
The energy sector also experienced a downturn, with Brent crude futures (LCOc1) falling 0.6% to $76.47 per barrel and U.S. West Texas Intermediate (WTI) crude (CLc1) dropping 0.56% to $73.14 per barrel.
Meanwhile, New Zealand's benchmark S&P/NZX 50 index (.NZ50) also saw a minor decline of about 0.2%, settling at 12,426.39 points.
As the Australian market grapples with these sector-specific declines and anticipates key economic data, investors remain cautious, awaiting clearer signals on economic growth and monetary policy direction.
