Australia: Shares slip as China Covid concerns hit miners, commodity stocks

[BENGALURU] Australian shares dropped on Tuesday (Mar 15), led by mining stocks due to a fall in iron ore prices after top steel producer China reported a surge in Covid-19 cases, while a broader pullback in commodity prices weighed on gold and energy firms.

The S&P/ASX 200 closed 0.7 per cent lower at 7,097.4, after ending up 1.2 per cent on Monday.

Investors remained cautious awaiting new developments in the Russia-Ukraine conflict and policy cues from the US Federal Reserve, which is expected to raise interest rates in its meeting on Wednesday.

"The market is quite nervous naturally, it is likely to remain volatile at least until the end of the week," Brad Smoling, managing director of Smoling Stockbroking, said.

He added that choppy commodity prices were likely to persist until a solution was found for cross-border tensions.

Leading declines, miners dropped 4.2 per cent to their lowest since Feb 24, as a surge in coronavirus cases in China hit prices of iron ore, a raw material used in making steel.

Rio Tinto, Fortescue and BHP fell between 3.7 per cent and 4.2 per cent.

Energy stocks declined nearly 3 per cent, with Woodside Petroleum and Santos easing 2.9 per cent and 3.6 per cent, respectively, as crude prices slipped amid ceasefire talks between Ukraine and Russia.

Gold stocks lost over 3 per cent, tracking weaker bullion prices. Newcrest Mining fell 2.8 per cent.

Tech firms fell 1.4 per cent, tracking the tech-heavy Nasdaq , as 10-year US Treasury yields rose ahead of the Fed meeting.

Bucking the trend, financial stocks firmed about 1 per cent, with the "Big Four" banks rising between 0.1 per cent and 1.5 per cent.

Uniti Group soared as much as 21.6 per cent before being halted from trading. Local media reported the broadband services provider was in exclusive talks for a potential sale, valuing it between A$2.75 billion (S$2.7 billion) and A$3.44 billion.

New Zealand's S&P/NZX 50 ended almost flat at 11,801.73. REUTERS