Australian shares began the week on a lower note on Monday, influenced by a decline in miners due to falling iron ore prices and as investors awaited key U.S. inflation data later in the week. The S&P/ASX 200 index fell 0.72% to 7,766.10 during the afternoon trading session, following a 0.1% decline on Friday.
Impact of Iron Ore Prices
The mining sector experienced a notable drop of 0.8%, driven by falling iron ore prices amidst decreased hot metal output, which dampened market sentiment. Heavyweight miners BHP Group (ASX: ASX:BHP) and Fortescue Metals Group (ASX: ASX:FMG) saw their shares fall by 0.8% and 1.4%, respectively.
Global Focus on U.S. Inflation Data
Investors worldwide are eagerly awaiting the U.S. inflation data for June, which is expected to provide insight into the Federal Reserve's interest rate strategy. Recent U.S. jobs data, showing unemployment at a 2.5-year high, has fueled expectations of a rate cut by the Fed, adding to the market's anticipation.
Energy Sector Decline
In Sydney, the energy sector declined by 0.6%, potentially marking its worst day since June 27. The drop followed a decline in oil prices, influenced by the likelihood of a ceasefire agreement in Gaza, overshadowing the summer's high demand for fuel and potential supply disruptions from storms in the Gulf of Mexico. Top energy producers, Woodside Energy (ASX: WDS) and Santos (ASX: STO), fell by 0.4% and 0.8%, respectively.
Financials Follow Suit
The financial sector also mirrored the broader index's decline, falling by 0.2%. The Commonwealth Bank of Australia (ASX: CBA), the country's largest lender, saw its shares drop by 0.3%.
Gold Stocks Rise
Contrary to the broader market trend, gold stocks rose by as much as 1.9%, reaching their highest level since 11 June. The sub-index was set to rally for a fifth consecutive day, buoyed by rising bullion prices following the recent U.S. jobs report, which reinforced expectations of a September rate cut.
New Zealand Market
In New Zealand, the benchmark S&P/NZX 50 index fell 0.5% to 11,730.42, reflecting a similar trend to its Australian counterpart.