PERTH: Turmoil across the commodities markets has taken over as the centrepiece issue for the Australian sharemarket, as the Greek debt negotiations and China’s equity bubble burst fade from investor memory.
Falling resources stocks hit the local market, which was also dragged lower by the financial sector after a threat of a downgrade to Australia’s credit rating hit that sector and the Australian dollar.
It was the Australian sharemarket’s third straight soft close.
At the 4.15pm (AEST) official market close, the benchmark S&P/ASX200 was down 24.2 points, or 0.43 per cent, to 5,566.1, while the broader All Ordinaries index had slipped 24.5 points, or 0.44 per cent, to 5,556.8.
Friday’s close puts the benchmark index 104 points, or 1.8 per cent, lower over the five trading sessions this week.
“The issue of falling commodities has replaced Greece and Chinese equity volatility as the centrepiece of the capital markets,” IG chief market strategist Chris Weston said.
The moves were caused by the prospect of future supply gluts across major commodities and concerns of slowing Chinese economic growth, while the approaching deadline for US Federal Reserve interest rate hikes were adding to the mess.
The price of copper, often used as a bellwether for the health of the global economy, was trading near its lowest level since 2009. Aluminium was also touching a similar low. Gold, which is usually supported in times of economic uncertainty as a safe haven investment, touched a new low of $US1,077 an ounce this week.
Gold miners were savaged, with Newcrest Mining dropping 4.81 per cent to $11.27, Evolution retreating 6.94 per cent to $1.005, Northern Star Resources falling 7.76 per cent to $2.02, and Regis Resources slipping 4.81 per cent to $1.285.Iron ore — Australian’s biggest export — continued its downward trend, moving back towards the $US50 mark, while oil prices in the US hit a four-month low as concerns of an oversupply in a slowing global economy push energy prices lower.
Meanwhile, BHP Billiton dropped 0.9 per cent to $25.27, while Rio Tinto was flat at $51.20.
