Commodity and equity markets experienced a downturn following the US Federal Reserve’s decision to maintain current interest rates. The ANZ China Commodity Index declined by 0.8%, with precious metals, industrial metals, and energy sectors all affected. Gold decreased by 0.6% to US$3,369 an ounce, while silver dropped 2.3% to around US$32 an ounce. Industrial metals also saw declines, with copper falling 1.2% to US$9,420 a tonne, and aluminum and nickel decreasing by 1.8% and 1%, respectively.
Iron ore prices also weakened due to concerns that China’s stimulus measures might not sufficiently boost demand, coupled with fears of oversupply, pushing the commodity price to just below US$98 a tonne. ANZ FX Analyst Felix Ryan noted the Federal Reserve cited increased uncertainty with risks to both inflation and unemployment. While the US held steady, the UK is expected to cut rates by 25 basis points to 4.25%.
Locally, the S&P/ASX200 mirrored the US market’s decline, falling by 0.17% to 8,164 points in morning trading. The materials sector experienced a 0.47% loss, and the financial sector dipped by 0.2%. Lithium miners Pilbara Minerals and Liontown Resources saw declines of 4.22% and 3.6%, respectively. However, Orica bucked the trend, surging 6.5% after reporting a 40% increase in net profit after tax.
