ASX ends lower before RBA call; miners weigh, IperionX sinks 22pc

The Australian sharemarket fell to a three-month low after a sell-off in the mining sector and hostilities in the Middle East kept the oil price above $US100 a barrel.

The S&P/ASX 200 Index fell 33.70 points, or by 0.4 per cent to 8583.40, despite six of the 11 sectors finishing higher. Since the war broke out at the end of February, almost $230 billion has been erased in market value.

Investors were also keeping their powder dry before Tuesday’s interest rate decision by the Reserve Bank of Australia where most economists expect a second rate rise this year.

Datt Capital chief investment officer Emanuel Datt said the rate outlook and the oil shock from the Iran conflict had led to a risk-off environment.

“The outlook for equities will likely remain subdued until there is further certainty around the Iran conflict,” Datt said.

“Miners have been sold off due to investor fears around potential supply chain disruptions and an increase in their cost bases driven by higher fuel prices. We expect miners to remain soft until the supply chain fears resolve.”

On the ASX, gold miners dived as the precious metal fell to $US5000 an ounce and investors weighed a softer dollar against continued threats to global oil supplies. Newmont fell 4.2 per cent to $154.95 and Regis Resources by 8.3 per cent to $7.04.

Iron ore stocks also fell after China’s state-backed iron ore trader said it would temporarily ease restrictions on one of BHP’s iron ore products. BHP fell 1.2 per cent to $49.19 on Monday as iron ore dropped more than 1 per cent to below $US107; Rio Tinto lost 2 per cent to $154.70 and Fortescue 3.9 per cent to $19.69.

South32 lost 5.7 per cent to $4.16 as it placed its Mozal Aluminium smelter in Mozambique on care and maintenance after failing to secure sufficient and affordable power. It flagged one-off costs of $US60 million ($86 million).

There was some reprieve from the oil price, with Brent trading around $US104.70 after an earlier spike. Energy stocks were still well bid. Woodside Energy rose 1.9 per cent to $31.63 and Santos by 2.1 per cent to $7.69. Coal miners dropped following recent strong gains. Yancoal fell 1.2 per cent to $7.96 and Whitehaven Coal fell 5.4 per cent to $8.85.

Stocks in focus

In company news, Reliance Worldwide climbed 6.9 per cent to $3.12 as it announced a further $120 million on-market share buyback, adding to a prior $US15.3 million program.

IperionX dived 22.2 per cent to $4.09 as the company told the market it could not explain the sharp fall. It said investors had sought clarification on the funding mechanics of its US Department of Defence grants following the release of its half-year report on Friday.

KMD Brands dived 10.5 per cent to 17¢ as it hired Goldman Sachs to advise on its treasury and capital management strategy while reviewing funding options for the business.

Lynas Rare Earths added 1.4 per cent to $20.99 as it signed a deal with the US Department of Defence to supply light and heavy rare earth oxides, with $US96 million allocated over four years.

And Perpetual firmed 1.8 per cent to $16.53 as it agreed to sell its wealth management business to Bain Capital for $500 million.

That’s a wrap on today’s news. Join us again soon for more live markets news.