Australia: Shares slip as resources sectors drop on demand outlook

AUSTRALIAN shares inched lower on Friday, with key resources sectors leading declines on an uncertain demand outlook for commodities, while investors braced for another 75-basis-point interest rate hike by the US Federal Reserve next week.

The S&P/ASX 200 index fell 0.2 per cent to 6,782.0 by 0031 GMT.

However, it has gained about 2.7 per cent so far this week, heading for its best week since mid-March.

The Fed is widely expected to stick to a 75-bp hike to quell stubbornly-high inflation as the likelihood of a recession over the next year rises to 40 per cent, a Reuters poll found.

In Australia, energy stocks slumped 2.3 per cent as Brent crude prices fell on higher US stockpiles, while a bigger-than-expected rate hike by the European Central Bank on Thursday stoked demand worries.

Sector heavyweights Woodside Energy and Santos were down 2 per cent and 2.6 per cent, respectively.

Miners slipped about 0.7 per cent on weak iron ore prices in China on account on waning demand due to Covid-19 restrictions in Asia’s largest economy.

Sector majors Rio Tinto, Fortescue Metals Group and BHP Group all fell about 1 per cent. Financials advanced 0.5 per cent, with the “big four” banks trading lower in the range of 0.5 per cent and 0.8 per cent.

Gold stocks jumped about 2 per cent as a weaker US dollar made the safe-haven metal cheaper for buyers holding other currencies. Newcrest Mining and Northern Star Resources advanced 1.5 per cent and 2.7 per cent, respectively.

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Tech stocks were up 0.3 per cent, following their US peers on the Nasdaq Composite Index.

New Zealand’s benchmark S&P/NZX 50 index rose 0.1 per cent to 11,285.94 and was on track to add 1.5 per cent for the week. REUTERS