The ASX 200 closed 0.55% lower as the Materials and Consumer Discretionary sectors weighed in the market.
However, mining losses were offset by strength in the tech sector, which gained 2.16% following strong support for Nvidia overnight after it beat earnings estimates and gained 6%. Healthcare also posted a solid day, gaining more than 1.43%.
A CommBank Cost of Living Insights Report has revealed that younger Australians, aged in their mid-to-late-twenties, have cut their spending more than any other age group including cuts to both discretionary items and essentials. Meanwhile, those over 65 continue to spend above the rate of inflation.
Copper to consolidate
Citi says copper prices are set to consolidate in the coming months after the price suffered its biggest fall in nearly two years, falling from a record high.
After soaring 37% from a year-to-date low of US$8,127 in early February to a record high of US$11,104, LME copper fell by as much as 4.6% to a five-day low of US$10,363 on Wednesday.
This comes amid renewed concern about China's demand on news that nearly two-thirds of China's copper rod producers had cut or stopped production due to slowing sales, based on its survey of plants covering about 30% of China's total fabrication capacity. Shanghai Futures Exchange copper inventories have also hit a record high for this time of year.
Max Layton, global head of commodities research at Citi, sees current price levels as "sufficient to avoid huge deficits in the copper market this year as the scrap market responds".
But after flagging a boom in copper some months ago, Citi still sees it hitting $US12,000 and possibly even $US15,000 in the next 12-18 months.
"The timing and degree of the next leg in the bull market depends on the degree of China easing and the degree of Fed easing/global manufacturing recovery," Layton says. He also sees a more dovish Federal Reserve supporting copper later this year.
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