(SYDNEY, AUSTRALIA) – In a turnaround on Monday, the Australian Securities Exchange managed to recover from its four-day losing streak, primarily driven by a surge in iron ore mining companies and the prominent banking sector.
The benchmark S&P/ASX 200 Index concluded the day with a 0.5 percent gain, equivalent to 36.6 points, closing at 7192.3. This rebound came after initially falling by 0.2 percent earlier in the trading session. The broader All Ordinaries index also saw an increase of 0.4 percent, closing at 7387.8.
The rise in iron ore prices played a crucial role in boosting materials stocks, with key players such as BHP climbing 1.1 percent to reach $43.66, Rio Tinto gaining 1.1 percent at $112.40, and Fortescue Metals surging by 1.2 percent to $19.63.
ASX Rebounds and Iron ore futures in Singapore rise by 2.8%
Iron ore futures in Singapore witnessed a notable uptick of 2.8 percent, reaching $US116.55 per tonne for October contracts. This resurgence followed a period of decline that had pushed commodity prices below $US100 per tonne in mid-August.
Market analysts, including those from Morgan Stanley, indicated that iron ore had “exceeded expectations,” as earlier projections of reduced steel production in China did not materialize as anticipated.
However, concerns linger as excess savings, which had provided a cushion against rising prices, are expected to deplete in the current quarter.
Delinquency rates on credit cards and auto loans have been on the rise following a significant increase in interest rates by the Federal Reserve.
Three-quarters of respondents in a survey pointed to the dwindling availability and escalating cost of credit, particularly with mortgage rates reaching their highest levels in nearly two decades.
On a positive note, financials, including Commonwealth Bank, ANZ, NAB, and Westpac, experienced gains ranging from 1.2 to 1.8 percent, contributing to the ASX 200’s rise.
Market sentiment also benefited from a rebound in the Australian dollar, which saw a 0.7 percent increase to reach US64.2¢ after recently hitting a 10-month low.
Healthcare stocks, however, were among the weakest performers on the ASX 200, ending 0.7 percent lower. CSL, a heavyweight in the healthcare sector, fell by 0.8 percent to $268.57, attributed to trading ex-dividend.
In corporate news, Syrah Resources saw a significant jump of 7 percent to 61¢ after securing a $150 million loan for its Balama operation in Mozambique.
Bendigo and Adelaide Bank also experienced a 2.7 percent increase, closing at $9.21, following the appointment of David Foster, a former Suncorp CEO and current board member, as its next chairman.
On the downside, scrap metal recycler Sims saw a substantial decline of 10.6 percent, closing at $13.79. The company projected that earnings would break even in the first quarter of FY24 due to ongoing issues related to scrap metal prices and demand.
The ASX-listed shares of Block, the parent company of Afterpay, fell by 3.7 percent to $83.95. These shares had already fallen by over 7 percent following reports of outages in its payments app in the United States.
