The Australian sharemarket dropped on Monday after a sell-off in commodity prices hit the mining giants, with both BHP and Rio Tinto tumbling more than 2%.
The S&P/ASX 200 index fell 62.3 points, or 0.7%, to 8635, tracking broad weakness on Wall Street amid investor jitters about the US tech sector. On the ASX, the materials sector was by far the biggest detractor on the bourse, leading ten of the 11 sectors into the red.
That’s after copper fell more than 3% on Friday from a record high, while iron ore futures lost as much as 1.6% in Singapore to $US100.70 a tonne on Monday, after China said it would introduce a licensing system on the export of certain steel products from January.
“A risk-off tone across markets weighed on sentiment across the base metals complex, with copper giving up gains achieved earlier in the week,” ANZ wrote in a report to clients, “A sell-off in AI-focused stocks [has] triggered profit-taking by investors.”
That profit-taking hit the index heavyweights, with BHP falling 2.9% to $44.27 and Rio Tinto 2.4% to $139.94. Fortescue slipped 1% to $22.74 as it agreed to acquire the remaining 64% of Canadian-listed Alta Copper it does not already own at $C1.40 per share.
Even gold miners were sold off, despite the precious metal trading at $US4,310 an ounce after adding more than 2% last week. Evolution Mining, which has more than doubled this year, dropped 3.8% to $12.28, while Northern Star was off 2.1% to $26.77.
Lithium stocks were also weaker, with PLS tumbling 3.9% to $3.94 and Liontown Resources down 6.4% to $1.39.
Elsewhere, the major banks were mixed, with Commonwealth Bank off 0.6% to $155.08 and ANZ up 1.2% to $36.24.
Consumer discretionary was the sole sector to trade higher, led by a 2.3% rally in JB Hi-Fi to $93.95. The rest of the industry group posted more modest gains, with Wesfarmers up 0.8% and Harvey Norman 0.9%.
In company news, ASX Ltd dropped 5.7% to $53.66 after the market operator agreed to governance reforms arising from an ASIC report, which stipulated it must hold an additional $150 million in capital until agreed milestones are met. ASX will also cut its dividend payout ratio to 75 to 85%.
Westgold Resources fell 2.8% to $5.93 amid the broad mining sell-off. The miner has received approval to demerge its non-core Reedy and Comet gold assets into a new ASX-listed company, Valiant Gold, with an initial public offering planned for the March quarter.
Tyro Payments rose 1.5% to $1.02 on news it will acquire Thriday, an artificial intelligence-powered financial management platform for SMEs.
4D Medical rose 9.9% to $2.44 after the company received regulatory approval for its CT:VQ software scanning technology, which can now be deployed across Canada via its partnership with Philips.
DroneShield was the market leader, soaring 10.6% and continuing a seesaw run that has seen it jump 18% in the past five days to reduce losses in the past month to 12%.
And Treasury Wines requested a trading halt on Monday after the Penfolds owner said it was in the final stage of preparing an update on the “company’s outlook”. It already had an investor and analyst call scheduled for Wednesday.
