Big miners suffer as weaker commodity prices hit
The benchmark S&P/ASX 200 Index dropped 32.2 points, or 0.67 per cent, to 4809.5. The All Ordinaries dropped 28.8 points, or 0.6 per cent, to 4797.6.
The big miners and banks dragged the market lower.
"Weaker commodity prices set the theme," said RBS Morgans client adviser Bill Chatterton. "BHP, Rio and Newcrest are all suffering, and the banks have got knocked around a bit."
The energy sector was more resilient due to better oil prices, while overall trading volumes were relatively light.
BHP Billiton dropped 65¢ to $30.95, Rio Tinto shed $1.06 to $51.64 and goldminer Newcrest lost 83¢, or 7.7 per cent, to $9.90.
Fortescue Metals Group lost 6¢ to $3.30. Atlas Iron was down 4.75¢ to 79.5¢ after saying it would start construction on a new Pilbara mine. Oil and gas players finished stronger, with Woodside up 30¢ at $36.19, and Santos adding 19¢ to $13.41.
The wider market took a hit after the release of ANZ job advertisement figures, which showed a 1.8 per cent fall in the number of ads posted in June. Official labour force data will be released on Thursday.
Among the big four banks, Commonwealth shares were flat at $68.99, Westpac shed 1¢ to $28.34, ANZ lost 27¢ to $28.13 and National Australia Bank closed 30¢ lower at $28.87.
The Sydney gold price was $US1221.70 an ounce, down from $US1243.10 on Friday.
The dollar was lower as the greenback continued to surge after strong US jobs data. At 5pm on Monday it was trading at US90.58¢, down from US91.42¢ on Friday.
UBS interest rate strategist Andrew Lilley said bond futures recovered some of the losses that followed the release of the US non-farm payrolls data on Friday night.
He said investors would wait for Thursday morning (Australian time) to hear what US Federal Reserve chairman Ben Bernanke had to say in a scheduled speech.
At 4.30pm on Monday, the September 10-year bond futures contract was trading at 96.08 (implying a yield of 3.92 per cent), down from 96.165 (3.835 per cent) on Friday.
Frequently Asked Questions about this Article…
The ASX fell mainly because weaker commodity prices weighed on investor sentiment and there was concern about higher unemployment after ANZ's job advertisement figures showed a 1.8% fall in ads for June. The S&P/ASX 200 dropped 32.2 points (0.67%) to 4809.5 and the All Ordinaries fell 28.8 points (0.6%) to 4797.6.
Big miners were hit notably: BHP Billiton fell 65¢ to $30.95, Rio Tinto dropped $1.06 to $51.64, and gold miner Newcrest lost 83¢ (7.7%) to $9.90. RBS Morgans client adviser Bill Chatterton said weaker commodity prices set the theme and contributed to the miners' weakness.
Oil and gas companies were more resilient because of stronger oil prices. For example, Woodside rose 30¢ to $36.19 and Santos added 19¢ to $13.41, while some iron ore and gold names were weaker.
The big four banks were mixed to lower: Commonwealth Bank was flat at $68.99, Westpac slipped 1¢ to $28.34, ANZ fell 27¢ to $28.13, and National Australia Bank closed 30¢ lower at $28.87. The banks were dragged down alongside miners and broader market concerns.
The Sydney gold price fell to US$1,221.70 an ounce from US$1,243.10, while the Australian dollar eased to US$0.9058 from US$0.9142 as the US dollar strengthened after strong US jobs data. For investors, a weaker gold price and a softer AUD can affect returns for commodity exporters and currency-exposed portfolios.
Yes. Fortescue Metals lost 6¢ to $3.30, and Atlas Iron fell 4.75¢ to 79.5¢ even though it said it would start construction on a new Pilbara mine. The Atlas Iron update shows company-specific project news can move smaller miner shares independently of commodity swings.
UBS strategist Andrew Lilley noted bond futures recovered some losses after the US non-farm payrolls release. Investors were also waiting for a scheduled speech by US Fed Chair Ben Bernanke. As of 4:30pm on Monday the September 10-year bond futures contract traded at 96.08 (implying a 3.92% yield), down from 96.165 (3.835%) on Friday.
The 1.8% fall in ANZ job adverts for June raised concerns about the jobs outlook and contributed to the market decline. With official labour force data due on Thursday, investors were likely to watch that release closely for confirmation of employment trends and potential impact on stocks, especially banks and consumer-sensitive sectors.
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