ASX closes 0.76% lower as commodity stocks experience sell-off

Market Reports

by Peter Milios

The Australian sharemarket experienced a decline on Monday due to a sell-off in commodity stocks, primarily driven by a drop in the value of iron ore. This decline was prompted by concerns that Beijing might intervene to control rising prices, causing the materials sector to underperform. Notable companies such as BHP, Fortescue Metals, and Rio Tinto saw their stock prices decrease as a result.

Additionally, iron ore prices saw a decline after a prolonged period of weekly gains, influenced by Beijing's warnings about increased market supervision to curb price increases, with futures trading lower on the Singapore exchange. In the realm of oil, prices stabilized following a three-day drop, as there were indications that OPEC+ might consider deeper production cuts in their upcoming meeting. Brent crude oil traded near $81 a barrel after a 2.3% decline in the previous three sessions, impacting companies like Woodside Energy and Santos.

At the closing bell, the S&P/ASX 200 was 0.76 per cent lower at 6,987.60.

Futures

The Dow Jones futures are pointing to a fall of 94 points.

The S&P 500 futures are pointing to a fall of 15 points.

The Nasdaq futures are pointing to a fall of 78.25 points.

The SPI futures are down 55 points.

Best and worst performers

The best-performing sector was Information Technology, up 0.45 per cent. The worst-performing sector was REITs, down 1.35 per cent.

The best-performing stock in the S&P/ASX 200 was Weebit Nano (ASX:WBT), closing 5.41 per cent higher at $3.70. It was followed by shares in Ramelius Resources (ASX:RMS) and Genesis Minerals (ASX:GMD).

The worst-performing stock in the S&P/ASX 200 was Core Lithium (ASX:CXO), closing 4.35 per cent lower at $0.33. It was followed by shares in Sayona Mining (ASX:SYA) and Megaport (ASX:MP1).

Asian markets

Japan's Nikkei has lost 0.53 per cent.

Hong Kong's Hang Seng has lost 0.72 per cent.

China's Shanghai Composite has lost 0.11 per cent.

Company news

Tamboran Resources (ASX:TBN) has commenced stimulation activities at the Shenandoah South 1H well pad within its 38.75 per cent owned and operated EP 117 permit. The program, which is planned to include 10 stimulation stages over a 500-metre (1,640-foot) horizontal section within the Mid-Velkerri B Shale, is expected to be completed in December 2023. Shares closed 11.54 per cent higher at 14.5 cents.

RareX Limited (ASX:REE) has taken another important step towards de-risking the infrastructure supply and export pathway for its 100%-owned Cummins Range Rare Earths & Phosphate Project after securing a strategically located parcel of land at Wyndham Port for product storage and transfer. The deal is an agreed option fee of A$25k annually for up to five years with a purchase price of A$650k at RareX’s election. Shares closed 10 per cent higher at 3.1 cents.

Black Canyon (ASX:BCA) has announced that there KR1 and KR2 mineral resource estimate now exceeds 100Mt. In response, Black Canyon Executive Director, Brendan Cummins, said, “To put this into perspective, in the two and half years since 1 ASX release 24/11/2022 Mineral Resource increases by 64% at Flanagan Bore 2 listing, Black Canyon has discovered more manganese than is held by any other company in Western Australia with a massive inventory of 28.4 Mt of contained manganese.” Shares closed flat at 14 cents.

Commodities and the dollar

Gold is trading at US$2,014.20 an ounce.

Iron ore is 0.6 per cent higher at US$135.60 a tonne.

Iron ore futures are pointing to a 0.1 per cent rise.

Light crude is trading $0.73 lower at US$74.81 a barrel.

One Australian dollar is buying 65.76 US cents.

Peter Milios

Peter Milios is a recent graduate from the University of Technology - majoring in Finance and Accounting. Peter is currently working under equity research analyst Di Brookman for Corporate Connect Research.

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