Dropping Australian Stock Market Suffers Substantial Decline
The Australian stock market experienced a minor correction on Tuesday, with the ASX 200 falling approximately 0.4% to 8,935 points. This pullback follows a series of record highs, as the market takes a moment to "catch its breath" [1].
The decline was influenced by various sectors, including gold miners, energy stocks, and tech stocks.
Gold miners, such as Gold Road Resources, Evolution Mining, Newmont, Northern Star resources, and Resolute Mining, have had mixed performances. Although gold stocks had earlier rallied due to bullion prices hitting five-week highs and strong commodity prices, the broader market pause impacted them. The recent decline may reflect investors locking in profits after the earlier surge combined with the overall market pullback [1][4].
Energy stocks, including Oil stocks like Origin Energy, Woodside Energy, Beach energy, and Santos, declined due to weakness in oil prices, which typically exerts downward pressure on energy-related equities. This aligns with external factors such as global oil demand and supply dynamics influencing the market sentiment [2].
Tech stocks, while not explicitly detailed in the search results, generally tend to be sensitive to market volatility and changing investor sentiment, especially around interest rate expectations. The market is awaiting clearer guidance on interest rates following comments by the US Federal Reserve chair hinting at a possible interest rate cut in about three weeks [1].
The Aussie dollar is trading at $0.650. The S&P/ASX 200 Index is losing 65.70 points or 0.73 percent, trading at 8,893.60. The All Ordinaries Index is down 63.30 points or 0.69 percent, trading at 9,170.20. Major companies like Rio Tinto and Fortescue are losing almost 1 percent each.
Meanwhile, the broader global market environment was mixed, with US markets also showing a slight pullback after strong gains earlier, driven by Federal Reserve comments supporting expectations of rate cuts, which can create volatility ahead of actual announcements [1][3].
Elsewhere, BHP Group is edging up 0.4 percent, while Zip and WiseTech Global are losing almost 1 percent each. The U.K.'s FTSE 100 Index rose by 0.2 percent, and the German DAX Index dipped by 0.2 percent. The French CAC 40 Index declined by 0.5 percent. The Dow slipped 34.30 points or 0.1 percent to 44,911.82, and the tech-heavy Nasdaq inched up 6.80 points or less than a tenth of a percent to 21,629.77. The major European markets ended the day mixed. Appen is gaining almost 1 percent, and Afterpay owner Block and Xero are advancing almost 2 percent each.
Crude oil prices climbed on Monday, with West Texas Intermediate crude for September delivery up $0.60 or 0.96 percent at $63.40 per barrel. Mineral Resources is advancing almost 1 percent.
[1] ABC News, "ASX 200 falls after record highs as investors take profits," 12 July 2022. [online] Available at: https://www.abc.net.au/news/business/2022-07-12/asx-200-falls-after-record-highs-as-investors-take-profits/101161872
[2] Reuters, "Oil prices fall as demand concerns outweigh tight supply," 12 July 2022. [online] Available at: https://www.reuters.com/business/energy/oil-prices-fall-as-demand-concerns-outweigh-tight-supply-2022-07-12/
[3] CNBC, "Dow drops more than 300 points as Fed Chair Powell signals possible interest rate cut," 12 July 2022. [online] Available at: https://www.cnbc.com/2022/07/12/stock-market-futures-open-to-close-news.html
[4] The Australian Financial Review, "Gold miners lift ASX as bullion prices hit five-week highs," 11 July 2022. [online] Available at: https://www.afr.com/markets/stocks/gold-miners-lift-asx-as-bullion-prices-hit-five-week-highs-20220711-p5bk8p
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