ASX falls after falling commodity prices

The ASX closed lower, a day after its biggest gain in six weeks. -AAP Picture

Falling commodity prices and a two-week low in oil prices sent ASX shares tumbling while the Reserve Bank showed little interest in raising rates amid uncertainty in Europe.

Energy and materials stocks fell two and three percent respectively on Tuesday as commodity prices fell after spikes caused by Russian supply uncertainty. The price of Brent crude oil fell 4% to US$102.02 a barrel.

The Reserve Bank in its March meeting minutes made no suggestion to follow its peers and raise rates soon.

“The war in Ukraine and the associated increase in energy prices have created additional uncertainty about the outlook for inflation,” according to the minutes.

Another factor driving up rates, wage growth has remained at modest levels.

The US central bank, the Federal Reserve, is expected to raise rates by a quarter of a percent this week to combat soaring inflation.

Still, Australia might have more reason to stop.

Its biggest trading partner, China, has locked down two cities due to a coronavirus outbreak and the country’s zero COVID strategy.

A total of 5,154 new infections were reported nationwide, and the cities of Shenzhen and Changchun were under stay-at-home orders.

Analysts say the lockdowns will impact economic productivity.

In Australia, the benchmark S&P/ASX200 index closed down 52 points, or 0.73%, at 7097.4 points.

The index is down about 500 points from its record high in August of last year.

The All Ordinaries Index closed down 66.1 points, or 0.89%, at 7,356.1 points.

The losses follow the market’s biggest gain in six weeks on Monday.

Large miners featured prominently in the indices. BHP and Fortescue fell four percent each to $45.37 and $17.15 respectively.

Rio Tinto has made a $2.7 billion bid for the remaining 49% of shares in mining company Turquoise Hill.

Turquoise Hill mines copper and gold in Mongolia, and Rio Tinto wants a bigger share of the mine there.

Rio Tinto fell 3% to $106.75.

Shares of telecommunications provider Uniti Group soared after a takeover bid.

Fund manager HRL Morrison & Co offered $4.50 per share in an offer worth about $3 billion.

Uniti Group rose 27% to $4.01.

Shareholders of energy supplier Senex voted overwhelmingly for a takeover bid.

Shareholders voted to accept an offer of $4.60 per share from Posco International subsidiary KA Energy.

Senex was little changed at $4.59.

Pathology and imaging provider Healius has declared a market buyback of up to $100 million.

The redemption will take place within the next 12 months.

Healius rose 3% to $4.45.

The big banks have all won. Commonwealth Bank and Westpac were the best. Each gained one percent to $103.78 and $23.49 respectively.

Donation software provider Pushpay gave a more detailed revenue forecast for the full year.

Underlying profit is expected to increase by up to 10% over the previous 12 months and be in the range of $61.5 million to $63.5 million.

Pushpay rose 4% to $1.01.

The Australian dollar was buying 71.85 US cents at 1724 AEDT, lower at 72.55 US cents at Monday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed down 52 points, or 0.73%, at 7097.4 points on Tuesday.

* The All Ordinaries Index closed down 66.1 points, or 0.89%, at 7,356.1 points.

* At 1724 AEDT, the SPI200 futures index fell three points, or 0.04%, to 7094 points.

CURRENCY OVERVIEW

One Australian dollar buys:

* 71.85 US cents, down from 72.55 cents on Monday

* 84.99 Japanese yen, from 85.28 yen

* 65.41 euro cents, from 66.36 cents

* 55.09 UK pence, from 56.62 pence

* 106.63 New Zealand cents, from 106.76 cents.

About Natalee Broderick

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