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Miner stocks fall in Asia as commodity prices sink
[HONG KONG] Australian mining companies led losses in Asian mining and energy firms Tuesday, with Australian giant BHP Billiton sitting at a 10-year low, as metals prices slip further on slack demand and a strong dollar.
Traders tracked losses in New York and Europe as concerns about the global economy returned, particularly the sharp growth slowdown in China, a crucial buyer of commodities.
Producers took a hit as the price of copper sank to a six-year low below US$4,500 a tonne Monday, nickel was at its lowest for more than a decade, and zinc and silver declined.
Oil prices saw a pick-up in early Asian trade but remain subdued owing to a supply glut and continued overproduction.
"Wild gyrations in oil and another copper tumble could see further pressure on resource stocks," Michael McCarthy, chief markets strategist in Sydney at CMC Markets, told Bloomberg News.
BHP, the world's biggest miner, fell 1.2 per cent and rival Rio Tinto lost 0.8 per cent, while Fortescue Metals was off more than three percent. In Hong Kong China Shenhua shed two percent, while Sinopec slipped 0.6 per cent.
Weakness in commodity prices weighed on Wall Street, where all three main indexes ended in the red while London, Paris and Frankfurt were also lower.
In Asia Monday Sydney shed 0.4 per cent and Hong Kong was 0.7 per cent off while Tokyo was marginally lower by lunch.
Traders in Shanghai sold up for a second day after China's securities regulator said Monday it would restart initial public offerings next week in the city as well as in Shenzhen.
The China Securities Regulatory Commission froze IPOs in July as part of efforts to staunch a market rout that saw a 40 per cent plunge in prices and wiped trillions of dollars off valuations.
The market has stabilised since August, rising more than 20 per cent, but investors are worried that the arrival of new firms will divert cash from existing listings, fuelling another round of volatility.
Shanghai was 0.7 per cent lower in late morning trade.
Regional traders are awaiting the release of fresh US data, including on economic growth, ahead of an expected Federal Reserve interest rate hike next month.
A string of figures from Washington in recent months has led the bank's policymakers to support a small increase in borrowing costs for the first time in almost a decade, sending the dollar rallying against its major peers.
However, it was lower against most emerging market units as dealers bet that any increase would be small and gradual.
The Malaysian ringgit jumped 0.9 per cent thanks to a rise in the price of oil, a key export for the country, while the South Korean won pushed 0.2 per cent higher. The Indonesian rupiah, Australian dollar and Taiwan dollar were also up.