Australian shares had a subdued tone on Monday with energy and tech leading losses, while investors were cautious ahead of the Reserve Bank’s rate decision and concerns about France’s pending elections.
The benchmark S&P/ASX 200 eased 0.1 per cent or 3.7 points to 7720.30, extending a 1.7 per cent drop over last week. That was the biggest decline in two months. All Ords also drifted 0.1 per cent lower.
Of the 11 sectors, five flashed red with weaker oil prices weighing on energy. Brent fell 0.3 per cent to $US82.34 a barrel and light crude also lost 0.3 per cent to $US78.18.
Santos dropped 1.1 per cent, Beach Energy and Woodside were both 0.6 per cent lower. Ampol fell 0.9 per cent.
Tech stocks also retreated, with Wisetech off 2.9 per cent, Zip 2.4 per cent lower and EML Payments 1.7 per cent down. Family-tracking app Life360, however, extended gains, up 3 per cent, following a 9.2 per cent advance last week.
Miners came under pressure with index heavyweights Rio Tinto and BHP both 0.7 per cent lower. Fortescue slipped 0.1 per cent in a volatile session. Iron ore prices slid further on Monday after economic data in top consumer China undershot expectations and as floods in the country cast a shadow on the near-term demand outlook.
The benchmark July iron ore in Singapore slumped 2.3 per cent to $US105 a ton, pulling close to the $US100 psychological level.
Gold miners bucked the trend, bolstered by a rally in the precious metal as traders raised bets the US Federal Reserve will cut rates this year. Spot gold traded at $US2325.89 per ounce, having jumped 1.3 per cent on Friday.
Lower rates make non-yielding bullion more attractive than other assets such as Treasury bonds. Bellevue Gold jumped 2.7 per cent, De Grey and Gold Road each climbed 1.7 per cent.
The big four banks swung to gains, led by Westpac’s 0.7 per cent lift.
The Australian dollar traded at US66¢, having gained 0.5 per cent last week.
Europe sell-off
In Europe, stocks extended their sell-off as risk appetite was dampened by political uncertainties in France. The pan-European STOXX 600 fell 2.4 per cent on the week, its largest single-week percentage drop of 2024.
For local investors, all eyes will be on the Reserve Bank’s rate decision and comments on Tuesday when the central bank is expected to keep rates on hold as it looks for evidence that inflation is under control.
Complicating the RBA’s decision is a slightly expansionary Albanese government budget, according to an internal RBA analysis, which comes as wage growth is rising with looming tax cuts and energy rebates. The central bank is widely expected to repeat it is not ruling anything in or out and is in data-dependency mode.
Seven other central banks will hold their policy meetings this week, including the Bank of England, the Swiss National Bank, and Norway’s Norges Bank.
Stocks in focus
Wagering giant Tabcorp reversed early losses to be up 1.8 per cent as the company appointed former Australian Football League boss Gillon McLachlan as chief executive.
Integral Diagnostics dropped nearly 4 per cent on plans to merge with Capitol Health in a deal that values its smaller rival at about $413 million. Shares in Capitol Health skyrocketed 12 per cent.
Automotive parts retailer Bapcor slumped 3.1 per cent after securing $400 million in bank loans to refinance debt.