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Aussie stocks fall on iron ore, oil retreat

ASX
The Australian sharemarket dipped lower throughout the July 8, 2024 trading day. Picture: NCA NewsWire / Damian Shaw

A tumble in iron ore and oil prices depressed the sharemarket on Monday, with heavyweight energy and mining stocks pulling the local bourse into the red.

The benchmark ASX200 fell 59.1 points, or 0.76 per cent, to close at 7763.2, while the broader All Ordinaries index shed 57.9 points, or 0.72 per cent, to finish at 8012.2.

Tech stocks lifted 0.25 per cent to close at 3088.8.

The Aussie dollar dipped 0.07 per cent against the greenback to buy US67.4c at the closing bell.

Nine of 11 industry sectors ended in the red, led by materials with a sharp 1.8 per cent fall, and energy, with a 1.45 per cent decline.

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Iron ore prices have slumped 3 per cent since Friday to hit $US110 a tonne, sparking a sell-off in Australia’s mining giants.

BHP tumbled 2 per cent to $43.48 a share, Rio Tinto retreated 2.42 per cent to $119.90, Fortescue dived 2.63 per cent to $21.82 and Mineral Resources fell 3.15 per cent to $56.33.

Energy heavyweights also slumped after Brent crude oil fell about 1.3 per cent on Friday to $US86 a barrel.

Woodside Energy shed 1.78 per cent to $28.84, while Santos declined 2.13 per cent to $7.82.

Monday’s sell-off came despite a buoyant Friday on Wall St, with US stocks hitting fresh highs following the release of non-farm payrolls data that propelled investor confidence of impending Federal Reserve rate cuts.

ASX
The ASX200 fell X per cent on July 8, 2024. Picture: NewsWire / Gaye Gerard

The Dow Jones lifted 0.2 per cent to 39,375 points, while the S and P 500 rose 0.5 per cent to 5567 and the tech-heavy Nasdaq climbed 0.9 per cent to 18,352.

Second quarter US earnings season kicks off this week, which will show whether the AI-fevered boom that has driven US equities higher this year can continue.

“Current projections have the S and P 500 reporting double-digit earnings growth in 2024 but for that to come to reality, Q2 earnings will need to impress,” eToro markets analyst Josh Gilbert said.

“Markets expect to see 8.5 per cent earnings growth year-over-year, with eight of 11 sectors set to see year-over-year growth, led by Communication Services, Technology, Healthcare and Energy.

“We’ll once again see investors looking to market darling Nvidia to deliver to reaffirm the AI boom is still in full swing.”

In corporate news, South Australian gold and copper explorer Rex Minerals soared 56 per cent to 43c after announcing a takeover bid from MACH Metals Australia.

MACH, which is owned by Indonesia’s Salim family, will acquire all of Rex’s shares for 47c each, a 79 per cent premium on the stock before the deal was announced.

The transaction will be subject to approval from the Foreign Investment Review Board.

Supplied Editorial Rex Minerals' Hillside copper project on the Yorke Peninsula.
The Rex Minerals Hillside copper project on the Yorke Peninsula. Picture: Supplied

Rex owns the undeveloped Hillside copper project in SA’s Yorke Peninsula.

“This transaction also represents a more certain outcome for wider stakeholders in Hillside, including the local community, the South Australian government and Rex employees who will benefit from the significant financial strength and proven track record of MACH to deliver the successful development of Hillside,” Rex CEO Richard Laufmann said.

Core Lithium leapt 9.9 per cent to 10c after announcing it had exceeded its production guidance for FY24.

The company produced 95,020dmt of spodumene concentrate, above its expected 90,000-95,000dmt range.

Small-cap coal miner Bowen Coking Coal slumped nearly 9 per cent to 5.1c a share after offloading 10 per cent of its Broadmeadow East mine to the Formosa Plastics Group, a diversified conglomerate headquartered in Taiwan.

Bowen Coking will use a portion of the sale proceeds to pay off debt.

The top gainer on the ASX200 was gold miner Red 5, which leapt 5.3 per cent to 39.5c.

The largest laggard was Arcadium Lithium, which tumbled 4.4 per cent to $4.93.