Commodity prices slip as impasse in Washington drags on
The market remained weak on Thursday as continuing uncertainty in the US caused commodity price falls, which in turn affected mining stocks.
At the close, the benchmark S&P/ASX 200 Index was down 5.9 points at 5147.1, while the broader All Ords fell 5.4 points to 5146.2.
Gold, copper and oil prices fell as the lingering US government shutdown stirred worries about demand for raw materials.
Bell Direct equities analyst Julia Lee said the local bourse improved slightly after the release of firm jobs data, but it was not enough to push it into firm positive territory.
"The key driver at the moment is negotiations around the debt ceiling," Ms Lee said.
"During the Asian session the US futures were up and that's the key reason we've seen improved sentiment on the Australian market."
She said investors overlooked positive news showing Australia's jobless rate fell to 5.6 per cent in September, down from 5.8 per cent in August.
The big miners were mixed, with BHP Billiton down 21¢ at $34.62, but Rio Tinto rose 1¢ to $60.21 and Fortescue Metals added 10¢ to $4.88.
Gold stocks suffered, with Newcrest Mining down 29¢, or 2.65 per cent, at $10.64.
The banks were mixed, with ANZ up 10¢ at $30.55 and Westpac up 3¢ to $32.20. National Australia Bank was down 9¢ at $34.17 and Commonwealth Bank fell 22¢ to $70.80.
Bank of Queensland gained 70¢ to $11.15 after lifting its full-year cash profit to $251 million, due to a reduction in bad debts.
The gold price was $US1307.55 an ounce, down $US6.73.
The dollar lost ground to US94.07¢ in late trade, from US94.33¢.
The bond market was also slightly weaker after better than expected employment data encouraged some investors to move into riskier assets.
Economists attributed the surprise fall in unemployment to a slight drop to 64.9 per cent in the number of people participating in the workforce.
Commonwealth Bank fixed-income quantitative strategist Philip Brown said bond prices fell after the surprisingly low jobless rate was released.
The December 10-year bond futures contract was trading at 95.875 (implying a yield of 4.125 per cent), down from 95.955 (4.045 per cent), while the three-year contract was at 96.850 (3.150 per cent), down from 96.890 (3.110 per cent).
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Commodity prices — including gold, copper and oil — fell as uncertainty from the lingering US government shutdown and debt ceiling negotiations raised worries about demand for raw materials. That weakness dragged local mining stocks and helped push the benchmark S&P/ASX 200 down 5.9 points to 5147.1 and the All Ordinaries down 5.4 points to 5146.2.
The big miners were mixed: BHP Billiton fell 21¢ to $34.62, Rio Tinto edged up 1¢ to $60.21, and Fortescue Metals gained 10¢ to $4.88. Commodity price falls hit some miners harder than others, producing varied stock moves.
The gold price fell to US$1307.55 an ounce, down US$6.73. Gold stocks suffered accordingly — for example, Newcrest Mining fell 29¢ (about 2.65%) to $10.64.
Australia’s jobless rate unexpectedly fell to 5.6% in September from 5.8% in August. The surprise drop encouraged some investors to move into riskier assets, which put mild downward pressure on bond prices. Economists noted the fall in unemployment partly reflected a small drop in workforce participation to 64.9%.
Bank stocks were mixed: ANZ rose 10¢ to $30.55 and Westpac gained 3¢ to $32.20, while National Australia Bank fell 9¢ to $34.17 and Commonwealth Bank dropped 22¢ to $70.80. Bank of Queensland stood out, rising 70¢ to $11.15 after lifting its full‑year cash profit to $251 million following a reduction in bad debts.
Bond prices fell slightly after the stronger‑than‑expected employment data. The December 10‑year bond futures contract traded at 95.875 (implying a yield of 4.125%), down from 95.955 (4.045%), and the three‑year contract was at 96.850 (3.150%), down from 96.890 (3.110%).
According to Bell Direct equities analyst Julia Lee, negotiations around the US debt ceiling and the continued US government shutdown were the key driver of sentiment. US futures moving higher during the Asian session helped lift local sentiment, but ongoing Washington uncertainty kept commodity prices and some stocks under pressure.
Keep an eye on three main themes highlighted in the article: developments in the US government shutdown and debt ceiling talks (which affect commodity demand), commodity price trends (gold, copper, oil) that influence mining stocks, and domestic employment and participation figures that can move bond yields and risk appetite. These factors together drove today’s moves in Australian shares and fixed income.
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