Australian shares, hurt by weak materials sector, open lower Wednesday
Australian shares experienced a downslide on Wednesday. While prices of copper and iron ore showed a regressive growth, gold prices remained steady.
Australian shares were largely affected by weakness in the materials sector. New Zealand shares, on the other hand, opened flat in the wake of a flaw that caused disruption to the start of trading.
The share price index slumped by 0.3 percent to 5735, marking a 26.4 point discount to the S&P/ASX 200 index close. On Tuesday, the benchmark closed 0.3 percent higher.
Gold prices retained stability on Wednesday ahead of US payrolls data this week. However, the prices remained close to the lows of four weeks they reached in the previous session on high expectations of a US rate increase in March. Gold mining companies Evolution Mining Limited and Northern Start Resources Limited sustained downfalls of 1.92 percent and 2.27 percent respectively.
"There is a push and pull between financials and resources. For the markets to go high, we need both of them to move in the same direction,” Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities, said. "There isn't any positive catalyst in the resources sector right now.”
Chinese iron ore futures received pressure from increasing stocks of raw material at Chinese ports and slow growth of steel prices, resulting in a downslide for the third session on Tuesday. On the other hand, copper slumped to its minimum for the month.
Financial stocks enjoyed a rise. National Australia Bank Limited and Westpac Banking Corp Limited gained 0.99 percent and 0.35 percent respectively. Meanwhile, Australian investors are waiting for the Chinese import and export data for February.
The start of trading for the New Zealand stock exchange was affected by a technical glitch. The opening was pushed back 90 minutes as a result.
US stock prices, hurt by weakness in drug and financial shares, suffered a fall overnight. On Tuesday, drug stocks on Wall Street traded lower following US President Donald Trump’s announcement that he will introduce a plan to strengthen competition in the drug industry – thereby helping lower prices for medicines.
