The 111-point slide in the ASX futures market on Friday night our time will test the resilience of the resources sector in particular today, and that could be a major factor in how far the market falls.
Some think last week’s slide absorbed a lot of the negativity, especially in the wake of the Fed’s rattling of market confidence by forecasting higher inflation and possible interest rates in 2023 instead of a year or so later.
While prices weakened on Thursday and Friday, the share prices of local miners took a big hit over all of last week. Despite which, the overall market still managed to post a small gain on the week.
The ASX 300 Metals and Mining Index fell 1.2% on Friday and almost 5% last week as iron ore gold, copper, lead, zinc and nickel prices softened and slid. The index is down more than 8% from its most recent peak on May 10.
For example shares in gold and copper miner Newcrest ended Friday down 2.95% but more than double that – 8.3% – for the week after gold and copper prices slid sharply.
Shares in gold miner Northern Star Resources slid 2.3% on Friday, but slumped more than 13% for the week. And shares in Evolution Mining only dipped 0.6% on Friday but lost 8% for the week.
OZ Minerals shares dropped 1% on Friday and 12% last week as its price was hit by the slid in both copper and gold prices.
Shares in BHP did well in comparison – its gold, copper and iron ore businesses all saw price falls last week (but oil eased higher). The price fell 2.4% on Friday which took the week’s loss to nearly 5%.
In contrast shares in Rio Tinto held up – down slightly on Friday and just over 1% for the week because it is seen as an iron ore company with interests in copper mines and associated exploration assets in Chile, the US and Australia.
Fortescue Metals shares though dropped 3.4% (including a 0.8% drop on Friday) despite having no other significant mineral apart from its dominant iron ore business.
