Australian shares end lower on rate outlook, miner South32's slump
22/07/2024 07:38
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ASX 200 closes at lowest in more than a week
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South32 plunges on viability of its alumina refinery
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Woodside Energy down over 2%
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NZ50 slips, but hovers near a 2-1/2-year high
(Updates to close)
By Sameer Manekar and Sherin Sunny
July 22 (Reuters) - Australian shares started the week
on a dismal note as rate-hike worries and uncertainty
surrounding the U.S. elections kept investors away, with the
sell-off further compounded by miner South32's 13% plunge on
doubts over its alumina refinery.
Investors remained on the sidelines for a third successive
day after mixed local jobs data last week and a still
above-target inflation cast doubt on the potency of the current
policy's restrictiveness, nudging up the chances of an August
rate hike by the Reserve Bank of Australia to 22%. 0#RBAWATCH
Traders also weighed U.S. President Joe Biden's decision to
withdraw his re-election campaign, and the consequences of a
potential Donald Trump presidency on markets.
The S&P/ASX 200 index .AXJO ended 0.5% lower at 7,931.7
points on Monday. The index is now around 152 points below its
all-time high scaled last week.
"The market has had a rocky start to the week, with
political uncertainty in the United States and interest rate
concerns putting investors into a 'selling mood' today," Tim
Waterer, market analyst at KCM Trade, said.
"A potential rate hike (by RBA) is hanging like a cloud over
the Australian market with investors nervous about whether the
economy can weather even tighter monetary conditions than we
presently have."
South32 S32.AX was the top loser, plunging more than 12%
to mark its worst fall since March 2020, after a statutory body
recommended conditions to its Worsley Alumina refinery that the
miner says create "significant operating challenges" and impact
viability.
Shares of South32 weighed in the mining index .AXMM , which
lost about 1%, with BHP Group BHP.AX and Fortescue FMG.AX
down about 0.4% each.
Banks .AXFJ shed 0.4% in their third successive session in
red. Three of the "Big Four" banks gave away between 0.5% and
1%.
Other sectors including healthcare .AXHJ , technology
.AXIJ , and energy .AXEJ were down between 0.3% and 1.7%,
with Woodside Energy WDS.AX losing 2.3% after the refiner said
it would buy U.S. LNG developer Tellurian TELL.A for $1.2
billion.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50
index .NZ50 edged lower to 12,309.91 points, but continued to
hover around its highest level since February 2022.
(Reporting by Sameer Manekar in Bengaluru; Editing by Sherry
Jacob-Phillips)
((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))
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