Australia: Shares snaps 3-day rally as Rio Tinto weighs; set for worst week in four

AUSTRALIAN shares snapped a three-session rally on Friday, as weakness in commodity prices weighed on mining and metal stocks, with mining major Rio Tinto tumbling after flagging a hit to its second-half earnings on inflation woes.

The S&P/ASX 200 index shed as much as 1.7 per cent at 6,537.2 by 0106 GMT. The benchmark has lost over 1.7 per cent this week, its biggest weekly drop in four weeks.

Leading the decline, local miners tanked as much as 3.9 per cent to hit their lowest since September 2021, as iron ore prices slipped on demand fears in China.

The sub-index is set to lose for six straight weeks, giving up 6.5 per cent in value this week. BHP and Fortescue Metals lost 3.7 per cent and 5.2 per cent, respectively.

Rio Tinto receded more than 3 per cent, losing more than 5 per cent this week. The miner said it was facing labour shortages in Western Australia and warned that rising inflation would impact its underlying earnings in the second half of the year.

Financials, one of the top-weighted sectors on the benchmark, slumped as much as 2 per cent. The country’s ‘big four’ banks fell between 1 per cent and 3 per cent.

The sub-index has lost 1.8 per cent this week.

Gold stocks fell 2.6 per cent to their lowest since October 2018, as strength in the US dollar dented prices of the commodity.

The sub-index slumped 3.5 per cent this week.

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Sector leaders Northern Star Resources and Newcrest Mining lost 2.5 per cent each. Energy stocks shed as much as 1.7 per cent, with sector majors Woodside Energy and Santos weakening 0.4 per cent and 0.6 per cent, respectively.

Bucking the trend, shares in domestic carrier Regional Express jumped 3.7 per cent, after the company said its unit would buy aviation operator Cobham’s fly-in fly-out business National Jet Express.

New Zealand’s benchmark S&P/NZX 50 index slipped 0.3 per cent to 11,156.64 and is set to lose over 0.1 per cent in value this week. REUTERS