Miners a drag as China outlook wanes
Finishing on the day's low, the benchmark S&P/ASX 200 Index fell 29 points, or 0.6 per cent, to 5117.9, while the broader All Ordinaries lost 31.4 points, or 0.6 per cent, to 5128.6.
Losses on the Shanghai index and a fall in local business confidence gave investors further reason to turn away from resources stocks as miners delay projects and look to cut costs with demand from China easing.
"[Miners] are going to remain captive to Chinese sentiment until there's a definitive turnaround. I don't think you're going to see investors embrace it too much," said JBWere executive director Mike Kendall.
BHP slipped almost half a per cent to $35.67, while rival Rio Tinto, which will reportedly cut investments in Guinea, in West Africa, dropped 1.9 per cent to $61.92. Fortescue Metals finished down 3 per cent at $4.24.
Mr Kendall said investors were chasing yields and resources companies were "notorious for not paying fantastic levels of dividends".
A drop in the iron ore price to $US144.1 per tonne, its lowest level this year, also hurt miners. Mr Kendall said most analysts expected iron ore prices to return to closer to the long-term average around $US120.
Commonwealth Bank continued to trade at record highs, finishing at $70.58. The bank is close to becoming the ASX's most valuable stock with a market capitalisation of $113.6 billion. BHP holds that title with a cap of $114.6 billion.
All the other major banks finished down slightly.
Woodside Petroleum shares fell 1.7 per cent to $36.75, as the company's $40 billion Browse gas project in Western Australia looks less likely to go ahead.
With its largest shareholder, Nathan Tinkler, facing the NSW Supreme Court over the liquidation of his private company Mulsanne Resources, Whitehaven Coal shares continued their slide, down 5.5 per cent to $2.39.
Pharmaxis, after poor earnings results and setbacks with US regulators, replaced its chief executive. The pharmaceutical company's shares lost 8.4 per cent to 54.5¢.
And the dollar moved to 4-year highs against the yen, at 99.233 yen in late trading.
Frequently Asked Questions about this Article…
The market fell as investors sold mining stocks after weak Chinese indexes and a drop in local business confidence. The benchmark S&P/ASX 200 fell 29 points (0.6%) to 5,117.9, and the All Ordinaries lost 31.4 points (0.6%) to 5,128.6.
Losses on the Shanghai index and softer Chinese demand have prompted investors to sell resources stocks. Miners are delaying projects and cutting costs, and industry commentary noted that miners will likely remain tied to Chinese sentiment until there is a clear turnaround.
BHP slipped about 0.5% to $35.67, Rio Tinto fell 1.9% to $61.92 amid reports it will cut investments in Guinea, and Fortescue Metals dropped 3% to $4.24 as the sector was hit by weaker Chinese demand and lower commodity prices.
Yes. Iron ore fell to US$144.1 per tonne, its lowest level this year, which pressured miner earnings and sentiment. The article notes many analysts expect iron ore to move closer to a long-term average around US$120 per tonne.
Most of the other major banks finished slightly down, but Commonwealth Bank continued trading at record highs, closing at $70.58. CBA was close to becoming the ASX's most valuable stock with a market capitalisation of $113.6 billion, compared with BHP's $114.6 billion.
Woodside Petroleum shares fell 1.7% to $36.75 after the article said the company's A$40 billion Browse gas project in Western Australia looks less likely to go ahead, weighing on the stock.
Whitehaven Coal fell 5.5% to $2.39 after volatility related to its largest shareholder, Nathan Tinkler, who is facing the NSW Supreme Court over the liquidation of his private company Mulsanne Resources.
Pharmaxis replaced its chief executive after reporting poor earnings results and facing setbacks with US regulators. The stock fell 8.4% to 54.5 cents on the news.
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