Aussie shares initially bucked a weak lead from Wall Street to open higher but have since made an about-face to drive further losses into a fourth straight session. US markets continued to lag in response to the US Fed raising rates for a fourth time in 2018 and cutting its forecast for 2019 hikes from three to two.
The ASX 200 opened more than 0.5% higher but has now fallen below 5500 points for the first time in over two years, down 25 points or 0.46% to 5480.3. The index is also pointing at a weekly loss of more than 2%.
While the losses are generally broad based, the materials are limiting broader declines. Iron ore prices shot up 2.5% while other base metal prices were mixed. BHP Group (BHP) and Rio Tinto (RIO) are higher by 1.4% and 0.7% respectively.
Gold miners are seeing significant advances with Northern Star (NST) climbing 3.5% with Newcrest Mining (NCM) up 3.3% as the price of gold is trading near a 6-month high. Resolute Mining (RSG) is climbing 5% as it looks to take advantage of the strength in gold prices and forward selling 30,000oz. of gold at A$1,783/oz.
Energy names have also continued to ease with oil prices falling another 5% overnight as weaker demand and higher US supply reserves weigh on the commodity. Santos (STO) and Beach Energy (BPT) are both weaker by more than 1%.
The financials have reversed early gains with the big four banks going from 1% advances in early trade to losses at lunch. The ANZ Bank (ANZ) is the worst as it slips 0.6%. Macquarie Group is down 1.6%.
Insurance Australia Group (IAG), which owns insurance brands such as NRMA and CGU, announced that claims from yesterday’s Sydney hailstorm to total $169 million. IAG shares are down 2.5%.
With little local economic data to move our currency, the Aussie dollar has steadied against the greenback after falling heavily following the US Fed decision and currentlybuys 71.18 US cents.
So far, 01B units have been traded worth $3.9B with 366 stocks higher, 551 lower and 331 unchanged.
Published by James Tao, CommSec