Tumbling oil and ore prices took the wind out of investors’ sails on Tuesday, with losses for big miners BHP, Rio Tinto and Fortescue Metals ensuring the Australian sharemarket finished in the red.
Resource-aligned companies were once again poor as a wider commodity crunch – dictated by fluctuating developments in Eastern Europe – rolled into a new day, hurting the materials and energy sectors that a week ago had ridden a war-fuelled price surge.
The local technology sector was also bloodied as Afterpay owner Block, Wisetech Global, Xero and Appen chased their US counterparts lower ahead of an imminent US rate hike, and amid news of a Covid-19 fuelled shutdown of China’s Shenzhen tech hub.
The benchmark ASX 200 handed back a portion of Monday’s gains to end the session 52 points, or 0.73 per cent, lower at 7097.4.
Gains for the major banks and healthcare firms helped limit losses somewhat as the market remains firmly within the 250-point range of 7200 and 6950 it has been in since the Russian invasion of Ukraine began nearly three weeks ago.
The broader All Ordinaries dropped 66.1 points or 0.9 per cent to 7356.1, while the Aussie dollar continued its recent slide to fall below 72 US cents at the local close.
IG Markets analyst Kye Rodda said investors were clearly in a “wait-and-see” mood, both in regards to talks between Russia and Ukraine, as well as what the US Fed will decide to do at its monetary policy meeting Thursday morning Australian time.
He also noted the murky outlook for growth and inflation and Covid-19 lockdowns in China were also puzzling investors.
“Some of the answers to these questions will come soon enough,” Mr Rodda said.
“Others will take some time. And that’s what’s generating a lot of the uncertainty driving current market volatility.”
Softening iron ore prices meant Australia’s mining giant again fell heavily on Tuesday, having had a similarly lacklustre session the day before.
BHP dropped another 4.2 per cent to close at $45.37 and has now – in the space of a week – handed back about 10 per cent of its value.
Rio Tinto was another heavy decliner on Tuesday, down 3.9 per cent to $106.75, and now more than 15 per cent off its recent six-month peak.
Fortescue Metals fell 4.9 per cent to $17.15, Mineral Resources lost 4.9 per cent to $44.53 and Champion Iron dropped 9.4 per cent to $6.39.
Gold miners Newcrest, Northern Star and Evolution each fell by a margin of between 2 per cent and 2.7 per cent after the precious metal retreated from recent highs, while rare earths miner Lynas dropped 8.3 per cent to $9.40 and lithium players Pilbara Minerals, Vulcan Energy and Allkem each put in a poor showing.
Woodside Petroleum dropped 2.9 per cent to $31.01 and Santos lost 4.1 per cent to $7.24, while coal miner Whitehaven fell 2.4 per cent to $4.02 and New Hope dropped 5.4 per cent to $2.80.
The financial sector fared better, with Commonwealth Bank leading gains for the Big Four banks, up 1.8 per cent to $103.78.
Westpac added 1.1 per cent to $23.49, ANZ rose 0.4 per cent to $26.69 and National Australia Bank climbed 0.9 per cexjmtzywnt to $30.64, while insurers Suncorp, IAG, QBE, nib and Medibank also provided support.
The same could not be said for tech and payment stocks, with the sector badly bruised and mirroring the fortunes of a freefalling Nasdaq.
Block dropped 5.2 per ent to $133.62 and rival buy now, pay later firm Zip Co lost 9.3 per cent to $1.41, while Splitit and Sezzle each shed more than 10 per cent.
Xero ended 0.5 per cent lower at $93.14, Wisetech Global 2.9 per cent down at $46.89 and Appen 1.6 per cent down at $6.70.
