The Australian Securities Exchange (ASX) fell 15.6 points or 0.2% lower to 8,126.4 on Wednesday as investors rotated from banking to mining stocks following stimulus efforts from the People’s Bank of China (PBOC) yesterday.
The mining sector surged 2.9% as BHP and Rio Tinto lifted 2.8% apiece, tracking higher iron ore prices in Singapore.
The rally in iron ore came after the PBOC announced a series of stimulus measures, including policies aimed at boosting bank lending to consumers and businesses, as well as a cut in its key short-term interest rate.
The central bank also revealed plans to lower mortgage rates for existing housing loans to support China’s struggling property market, a significant driver of iron ore demand.
In contrast, the financial sector posted the steepest declines, down 1.7%, with National Australia Bank leading the losses, falling 2.7%.
Among individual companies, Premier Investments tanked 9.9%. after the company announced the postponement of its proposed demerger of its Smiggle and Peter Alexander brands as it considers a potential deal with department store Myer.
The news coincided with Premier’s full-year financial results, which showed a 2.7% decline in revenue to $1.6 billion for the 2024 financial year, while net profit dropped 4.9% to approximately $257 million.
Meanwhile, Fortescue Metals rose 6.2% after securing a $2.8 billion deal to replace two-thirds of its Western Australia haulage trucks and equipment with electric models.
Overnight in the U.S., Wall Street experienced modest gains, with the Dow Jones rising 0.2%, the S&P 500 up 0.3%, and the Nasdaq climbing 0.6%.
Earlier today, the Australian Bureau of Statistics reported a slowdown in the country’s inflation rate. The monthly consumer price index (CPI) rose 2.7% year-over-year in August, down from 3.5% in July, marking the first inflation reading within the Reserve Bank of Australia’s target range since mid-2021.
On the bond markets, 10-year and 2-year rates were at 3.912% and 3.527%, respectively.