Australia: Shares end lower as China's fresh Covid woes weigh
AUSTRALIAN shares closed lower on Wednesday (Jul 6) as fears of Covid-19 lockdowns in China hit commodity stocks, adding to worries of a global recession.
The S&P/ASX 200 index ended 0.5 per cent lower at 6,594.50 points, after having risen 0.3 per cent on Tuesday.
A fresh round of Covid-19 testing in Shanghai, China’s most populous city, sparked concerns over further lockdowns in the country — the world’s top steel producer.
That brought down the metals and mining index 5.6 per cent. The big 3 miners, Rio Tinto, BHP Group and Fortescue Metals fell between 4.6 per cent and 7.2 per cent.
“Hopes of demand recovery in China are fading out, leading to a sell-off in commodity prices,” said Kunal Sawhney, chief executive of Kalkine Group.
The energy index fell 5.8 per cent as oil prices tumbled 9 per cent overnight.
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Index heavyweights Whitehaven Coal and Woodside Energy slid 3.7 per cent and 6.9 per cent, respectively.
Domestic gold stocks declined 5.3 per cent, tracking a dip in bullion prices overnight.
Northern Star Resources and Newcrest Mining slumped 3.6 per cent and 6.5 per cent, respectively. However, tech stocks added 3.1 per cent and financials 0.9 per cent, helping limit the losses.
“Today’s fall in Australian government bond yields boded well for tech and other growth stocks, which helped trim losses,” Sawhney said. Yields on 10-year bonds stood at 3.447 per cent, far below their June peak of 4.125 per cent.
Three of the 4 major lenders, CBA, ANZ and NAB raised their home loan variable interest rates by 50 basis points a year, following the central bank’s move to raise cash rate by half-percentage point.
New Zealand’s benchmark S&P/NZX 50 index closed 1.6 per cent higher at 11,141.07 points. REUTERS
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