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ASX loses steam as miners, energy drag

Prashant MehraAAP
The energy and mining sectors were the worst performers on the ASX in early trading.
Camera IconThe energy and mining sectors were the worst performers on the ASX in early trading. Credit: AAP

A broader sell-off in mining and energy stocks late in the session has pushed the Australian share market into the red, as investors remain jittery over prospects of a slowdown in global growth.

The benchmark S&P/ASX200 index dropped 28.2 points, or 0.43 per cent, to 6,539.9 on Friday. The index edged 0.6 per cent lower for the week.

The broader All Ordinaries lost 26.1 points, or 0.39 per cent, to 6,720.4.

Investors earlier shrugged off an overnight decline on Wall Street and weaker US consumer spending that indicated price pressures were still strong. But demand-tracking commodities such as oil and copper remained under pressure, resulting in broader losses in the mining and energy sectors.

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It comes after Australian shares posted losses of 10.2 per cent over the fiscal year ended June 30

"Soaring inflation and aggressive policies from global central banks to wind back the stimulus seen through the COVID period have contributed to the weakness in the Australian sharemarket over the past year," CommSec Chief Equities Economist Craig James said.

He expects the local market to claw back the losses over the next 12 to 18 months on the back of a strong domestic economy and an easing in inflationary pressures, but says investors need to remain alert amid the volatility.

On Friday, energy stocks were the worst hit after oil prices sank further after a three per cent decline overnight.

Sector leaders Woodside and Santos slid 4.4 per cent and 2.8 per cent respectively, while Beach Energy and refiner Ampol lost more than one per cent each.

Mining stocks weighed down the market further as iron ore prices continued to slip amid top steel producer China's demand constraints.

BHP, Rio Tinto and Fortescue Metals were down between two and three per cent.

Gold stocks were mixed, with top miner Newcrest sliding three per cent but Evolution Mining and Northern Star edging higher.

Regis Resources was the only gold producer to shine, jumping nearly eight per cent to $1.40 after billionaire Andrew Forrest abandoned plans to increase his stake in the company.

Financial stocks gave up some of their early gains amid the uncertainty over the extent of the rate hike the Reserve Bank will announce after its board meeting next week. Only two of the big four banks - CBA and NAB - ended slightly higher.

Technology stocks recovered some ground after a three-day losing streak.

EML Payments rose 1.2 per cent, while shares in Link Services and accounting software producer Xero ended in the green.

Shares of buy-now-pay-later firm Openpay soared 21 per cent to 14.5 cents after the company said it will pause its US operations and "materially" reduce its workforce.

The announcement also helped boost beaten down shares in bigger rival Zip Pay by nine per cent to 48 cents.

Meanwhile, the Australian dollar hit a two-year low of 68.13 US cents against a strengthening greenback in late trading, down from 68.82 US cents at Thursday's close.

ON THE ASX:

* The benchmark S&P/ASX200 index dropped 28.2 points, or 0.43 per cent, to 6,539.9 on Friday.

* The broader All Ordinaries lost 26.1 points, or 0.39 per cent, to 6,720.4

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 68.13 US cents, from 68.82 US cents at Thursday's close

* 92.06 Japanese yen, from 93.69 yen

* 65.22 Euro cents, from 65.91 cents

* 56.26 British pence, from 56.65 pence

* 110.16 NZ cents, from 110.68 cents

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