Banks, miners drag ASX to 1.1pc loss, Fitch puts US on watch
Thursday, May 25, 2023       14:16 WIB

Australian shares declined for a fourth consecutive session on Thursday as weaker iron ore prices weighed on the major miners, and the US debt ceiling impasse continued to rattle sentiment.
The price of the bulk commodity dropped 3.7 per cent to $US96.30 a tonne overnight amid further signs of weakening steel demand in China. Futures traded in Singapore dropped a further 0.6 per cent to $US94.90 a tonne on Thursday.
Fortescue Metals Group dropped 3.2 per cent to $19, BHP fell 1.6 per cent to $42.15 and Rio Tinto declined 1.6 per cent to $105.40. Champion Iron tumbled 3 per cent to $5.91 and Mineral Resources shed 3.1 per cent to $65.59.
"We expect more voluntary [output] cuts from steel mills in the coming weeks as steel demand remains weak, weighing on iron ore demand," said Anthony Yuen, head of Citi's Pan-Asia commodity strategy.
The S&P/ASX 200 Index fell 1.1 per cent, or 75.6 points, to 7138.2 on Thursday, led lower by the financials sector, which lost 1.9 per cent. The broader All Ordinaries Index shed 1 per cent to 7316.7.
Global markets remained cautious amid discussions about the US debt ceiling despite House Speaker Kevin McCarthy saying that a deal was possible before June 1. Even so, ratings agency Fitch placed the United States' AAA credit rating on watch for a possible downgrade.
Major banks post losses
Gold miners were among the biggest laggards as the price of the precious metal dropped nearly 1 per cent overnight to $US1957 an ounce, weighed down by a stronger US dollar.
Gold Road Resources fell 6.4 per cent to $1.74, Regis Resources declined 5.6 per cent to $1.94, West African Resources tumbled 5 per cent to 85.5 and De Grey Mining dropped 4.8 per cent to $1.29.
The major banks all posted losses, further weighing on the broader market; Commonwealth Bank fell 2.2 per cent to $97.72, National Australia Bank dropped 2.1 per cent to $26.04, Westpac tumbled 1.6 per cent to $20.89 and ANZ declined 2.6 per cent to $23.35.
The technology sector advanced 2.4 per cent as risk sentiment was boosted by a strong result from chipmaker Nvidia, which caused its share price to rally as much as 29 per cent in after-hours trading in New York.
Megaport jumped 12.8 per cent to $6.44, NextDC climbed 4.4 per cent to $12.19 and Altium added 4.3 per cent to $38.48.

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