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Pilbara Minerals fell 4.4 per cent, followed by Mercury Energy, down 4.1 per cent. The big miners all suffered after the price of iron ore fell to near $US100 per tonne overnight. Rio Tinto lost 1.4 per cent, while BHP fell 1.1 per cent, and Fortescue was down 0.5 per cent at the close.
As earnings season wound down, jeweller Michael Hill plummeted 3.6 per cent, after reporting a small post-tax loss, as increasing revenue in its Australian business was offset by a drop of 11.8 per cent in its New Zealand market.
The lowdown
Novis Capital senior investment adviser Gary Glover said the Australian market continued to be buoyed by expectations the US Federal Reserve will cut interest rates later this month, and had shown “robust” growth.
“The financials, that’s the part that sort of doesn’t make sense to anyone,” he said. “These things shouldn’t be trading as high as they are, but the market’s got the wind behind its back at the moment.”
He said losses in the materials sector continued to be a knock-on effect of a weakened Chinese economy on lithium and iron ore prices, saying prices were “getting pretty close to the bottom”, but might rebound if smaller producers were forced to put mines into maintenance, reducing supply.
Glover said he thought the market’s reaction to REA’s announcement about taking over its UK counterpart reflected the country’s lack of being “a happy hunting ground” for Australian businesses.
“That’s not to say that REA can’t make it happen,” he said.
Star Entertainment Group shares did not trade on Monday after the ASX suspended the casino group for failing to post its financial results within the reporting period.
The Aussie dollar was buying US67.81¢.
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In the US, a late-afternoon rally on Friday helped stocks bounce back from a mid-afternoon slide. The S&P 500 rose 1 per cent, with about 76 per cent of the stocks in the index notching gains. The Dow Jones rose 0.6 per cent, setting its fourth all-time high this week. The Nasdaq composite ended 1.1 per cent higher.
Wall Street spent the day mulling over encouraging reports on inflation, consumer spending and income.
The Commerce Department said its personal consumption and expenditures report showed prices rose just 0.2 per cent from June to July, up slightly from the previous month’s 0.1 per cent increase. Compared with a year earlier, inflation was unchanged at 2.5 per cent.
US stock exchanges will be closed on Monday for the Labor Day holiday.
with AP