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ASX slips on commodity sell-off

ASX WAR ECONOMY
The benchmark skidded lower on Tuesday as commodity-related stocks slipped into the red. Picture NCA Newswire/ Gaye Gerard

The sharemarket snapped a two-session winning streak on Tuesday as energy and material stocks sank as key commodity prices skidded lower.

At the closing bell, the S&P/ASX200 slipped 0.3 per cent, or 23.9 points, to 7737.1, while the broader All Ordinaries fell by 0.4 per cent to 7994.1.

Against the greenback, the Australian dollar finished lower, buying US66.66c at 4.30pm.

On the benchmark, nine of 11 industry sectors finished in the red, with energy stocks the worst performing, down 1.6 per cent, as investors digested plans unveiled by the OPEC+ oil cartel to end voluntary supply cuts earlier than expected, sending Brent crude tumbling below $US78 a barrel.

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“The market was expecting them to remain in place until the end of the year,” ANZ commodity strategists said in a note to clients.

Energy skidded lower after the OPEC+ oil cartel signalled it would end its supply cuts sooner than markets had anticipated. Picture: Supplied.
Energy skidded lower after the OPEC+ oil cartel signalled it would end its supply cuts sooner than markets had anticipated. Picture: Supplied.

“Nevertheless, the OPEC+ alliance warned that it could change its supply policy if market developments warrant it.”

Energy sector heavyweights fell during Tuesday’s session. Woodside shed 1.8 per cent to $27.43, Santos slipped 2.1 per cent to $7.51 and Beach Energy retreated 2.4 per cent to $1.64.

Material stocks also dragged on the benchmark as iron ore futures hit a fresh six-month low of $US108.80 a tonne on the Singapore exchange over concerns on Chinese demand.

BHP finished 1.2 per cent lower to $44.28, Rio Tinto slipped 0.8 per cent to $127.47, and Fortescue slumped 1.9 per cent to $24.32.

The sector’s decline was partly offset by a rally in gold miners as spot prices for the precious metal climbed above $US2350 an ounce after softer than anticipated US economic data signalled the Federal Reserve could cut rates sooner than expected.

Perseus Mining jumped 3 per cent to $2.39, De Grey Mining added 2.3 per cent to $1.12 and Northern Star added 1 per cent to $14.39.

Elsewhere on the benchmark, financial stocks softened losses, adding 0.2 per cent. CBA rose 1 per cent to $122.46, NAB climbed 0.3 per cent to $34.56, Westpac rose 0.4 per cent to $26.74 while ANZ was flat at $28.59.

Shares in GrainCorp advances after government projections forecast a bullish outlook for winter crop yields. Picture: Supplied.
Shares in GrainCorp advances after government projections forecast a bullish outlook for winter crop yields. Picture: Supplied.

In individual shares, GrainCorp was the top performer on the index, rallying 4.9 per cent to $8.87, after government forecasts projected Australia’s east coast winter crop would yield 27.1 million tonnes in the 2024 financial year, higher than the 20 million tonne average.

Family location sharing app Life360 added 1.9 per cent to $15.46 after it announced it would push ahead with an initial public offering in the United States worth $US175m.

Meridian Energy was the biggest laggard on the benchmark, plunging 7.6 per cent to $5.75.

On Wednesday, fresh national accounts data will be released, with economists forecasting that Australia’s economy expanded by 0.2 per cent in the March quarter.

That figure would bring annual growth to 1.2 per cent – its lowest level since 2000 outside the coronavirus pandemic.