Australia: Miners, Rio Tinto drag shares to end lower

AUSTRALIAN stocks ended lower on Friday (Jul 15), as weak iron ore prices pulled down mining companies, while Rio Tinto shares hit a nearly 8-month low after the global miner flagged dismal second-half earnings.

The S&P/ASX 200 closed 0.7 per cent lower at 6,605.60 points, snapping a 3-day run of gains. The benchmark hit a 3-week low during the session and dropped 1.1 per cent for the week.

Miners tumbled 3.4 per cent in their sixth straight weekly loss, tracking a fall in iron ore prices on fears over waning demand for steel in China after the country’s weak economic data.

The sub-index lost 6.6 per cent this week.

Shares of Rio Tinto, the world’s biggest iron ore producer, slipped 2.9 per cent after warning a hit to earnings from Covid-led labour shortages in Western Australia and soaring inflation.

BHP and Fortescue Metals retreated 3.5 per cent and 6.2 per cent, respectively.

Kerry Craig, a global market strategist at JPMorgan, noted that supply constraints in commodities are likely to support prices to a degree and that a global recession was not as imminent as many believe.

Financials shed 0.4 per cent and marked their worst day in 2 weeks. Westpac Banking and Australia and New Zealand Banking Group declined 0.2 per cent and 1.3 per cent, respectively.

Gold stocks dropped 2.1 per cent to their lowest in 3 1/2 years as fears of aggressive US interest rate hikes weighed on demand for the bullion.

SEE ALSO

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

Rio Tinto warns of earnings hit from Covid absences, inflation

Newcrest Mining and Northern Star Resources lost 2.8 per cent and 2.5 per cent, respectively.

Upcoming earnings in the US and forecast from Australian firms against the backdrop of rising prices were likely to be the dominant drivers of market sentiment in the near future, said JPMorgan’s Craig.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 ended 0.6 per cent lower at 11,122.61 points. Courier services provider Freightways and electricity generator Contact Energy were among the major laggards. REUTERS