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Commodity stocks drag Australian shares down; banks cushion the fall
Australian shares dropped for the second consecutive session on Wednesday, as investors shifted from commodity stocks to banks in search of stability and higher returns amid the cautious policy stance of Australia's central bank. The S&P/ASX 200 Index fell 0.1%, closing at 8,802 points. This is its lowest level since September-end and it now stands 313.2 points lower than its record high of 9115.20 points hit on October 21, 2010. Fortescue fell 2.5% due to lower iron ore, and Rio Tinto too. Gold stocks fell 1.1%, as the sector that recently propelled ASX200 to record levels dropped to follow bullion's overnight decline, posting its third consecutive session of losses. Small-cap producers, like Bellevue Gold ended the day 3.1% lower while Northern Star Resources, a larger producer, lost 0.5%. Commonwealth Bank of Australia, Australia's largest lender, rose 1.3%, its highest level since mid-August. This helped limit the benchmark index's losses, and the sub-index of financials closed 0.6% higher. National Australia Bank rose 1.7%. Markets looked to stable, high-yield banks because of inflated valuations, underperformance in certain sectors, and Reserve Bank of Australia’s cautious monetary policies. Tim Waterer, Chief Market Analyst at KCM Trade, said that CBA shares were benefiting from the current outflow of money in other sectors. The market is experiencing a high level of anxiety. In such circumstances, bellwether bank stocks look more attractive. The technology stocks fell 2.7%, to their lowest level since mid-May. This follows Wall Street's fall amid investor fears about a bubble in the market. Megaport fell 9.7% while WiseTech Global, the sector leader, lost 1.4%. The benchmark S&P/NZX 50 Index for New Zealand closed at 13,620.98, up 0.1%.
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Gold prices rebound from near-week-lows on bargain-hunting in advance of US jobs data
Gold prices rose Wednesday as bargain-hunters stepped in following a drop to a low of nearly one week in the previous session. The focus was also placed on U.S. payroll data, which could provide clues about future interest rate reductions. Gold spot rose 0.8%, to $3.961.85 an ounce at 0346 GMT. Bullion dropped more than 1.5% Tuesday, reaching its lowest level since October 30. U.S. Gold Futures for December Delivery rose by 0.2%, to $3.970.10 an ounce. The dollar was just below the three-month highs reached in the previous session. Jigar Trivedi is a senior currency analysts at Reliance Securities. He said that the demand for safe-haven gold was due to bargain-buying and a broader risk-off mood across financial markets. Investors' concerns over stretched valuations dampened confidence in Wall Street stocks as Asian stocks continued to fall overnight. Trivedi said that gold is under pressure due to the waning expectation of a rate cut in this year. If the ADP data are on the high side, the price could drop further down to $3.900. Last week, the U.S. Federal Reserve lowered interest rates. Chair Jerome Powell said it could be the final reduction of borrowing costs this year. CME's FedWatch Tool shows that market participants see a 69% probability of a December rate cut, down from 90% before Powell's remarks. The Fed's comments have revealed different perspectives on the data gap. Investors are focused on non-official reports due in the afternoon, such as the ADP National Employment Report. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Bullion reached a record-high of $4,381.21 in October but has since fallen by about 10%. Other than that, silver spot gained 1.2%, to $46.78 per ounce. Platinum was up by 0.1%, at $1,537.10, and palladium rose 0.2%, at $1394.75. (Reporting and editing by Subhranshu sahu, Eileen Soreng and Ishaan arora)
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ConocoPhillips Begins Drilling Offshore Eastern Australia
U.S. independent ConocoPhillips began drilling its first exploration well as part of larger campaign searching for natural gas offshore eastern Australia, 3D Energi, its junior partner in the project, said on Monday.Work began over the weekend on the Essington-1 well, which will take 32 days to drill down to 2,650 metres (8,694 feet), 3D Energi said in a filing to the ASX.The well is the first in the Otway Exploration Drilling Program to develop new gas for Australia’s eastern domestic market, the company said.Eastern and southern Australia is facing supply shortfalls before the end of the decade, causing tension between gas exporters and domestic manufacturers.The campaign represents one of the first major offshore exploration campaigns in East Coast waters in almost seven years as the old fields in the Bass Strait offshore the state of Victoria run dry.Under the Otway program, Conoco will drill two wells this year, out of a total of six planned, and an option for four additional wells if needed.The tight domestic eastern gas market has been a source of political tension for many years.An "Australian Domestic Gas Mechanism" trigger was introduced in late 2017, limiting the export of spot cargoes when gas was tight from the three liquefied natural gas consortia in Queensland fed by the state’s onshore coal seam gas fields, with backup from Victorian gas supplies. ConocoPhillips is operator of one, Australia Pacific LNG.The current Labor government has considered expanding export controls since its first term in 2022. Japan has argued against controls as it is Australia’s largest LNG buyer.(Reuters - Reporting by Helen Clark; Editing by Christian Schmollinger)
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Oil prices fall amid market declines and strong dollar pressure
The oil prices fell on Wednesday as investors assessed the outlook for supply, amid a wider financial market slump and a stronger U.S. Dollar. Brent crude futures fell by 6 cents or 0.1% to $64.38 per barrel at 0408 GMT. They had previously hit a two-week low. U.S. West Texas Intermediate Crude was down 10 cents or 0.17% at $60.46. In a client note published on Wednesday, ANZ analysts noted that investors had left the energy market due to a risk-off mood across all markets. After an overnight sell-off led by tech on Wall Street, the market volatility in Asia reached levels last seen in April. The U.S. Dollar Index - which measures currency against euro, sterling, the yen, and three other counterparts - was stable at a 3-month high. This was boosted by divisions within the Federal Reserve Board, and indicates low odds of an interest rate reduction at the next policy meetings in December. The demand for oil can be affected by a stronger dollar. Demand is typically boosted by a U.S. rate cut. Tony Sycamore, IG's market analyst, said that crude oil was trading lower as the risk sentiment shifted to a negative direction, boosting the U.S. Dollar, a safe haven currency. Both factors weighed on crude oil prices. The API data on Tuesday showed that U.S. crude stocks rose during the week ending October 31. This put pressure on prices. Prices were still being affected by supply-side concerns. OPEC+ (Organisation of Petroleum Exporting Countries) and its allies, also known as OPEC, agreed to increase production by 137,000 barrels a day in December. The group decided that it would halt further increases during the first quarter 2026. The pause, however, was "unlikely" to provide meaningful support for November and December prices. LSEG analysts stated in a report. OPEC only increased its production by 30,000 bpd compared to 330,000 bpd the month before as OPEC+ agreed increases were offset due to declines in Nigeria. Libya, and Venezuela. Reporting by Colleen Liu and Siyi Liu from Singapore and Beijing; Editing by Christian Schmollinger, Christopher Cushing
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PMI data shows that growth in the UAE's non-oil sectors slowed slightly in October.
A survey on Wednesday showed that the growth in non-oil activity in the United Arab Emirates in October was less robust, and business confidence had fallen to its lowest level in almost three years. The S&P Global UAE Purchasing Managers' Index, which is adjusted for season, fell to 53.8 from 54.2 in Septembre but remained well above 50.0, the mark that indicates expansion. The growth was driven by an increase in new orders and improved economic conditions, as well as increased marketing efforts. The pace of growth in new business slowed compared to September and orders from foreign clients only increased marginally. The subindex for new orders fell from 57.2 in September to 56.0 readings in October. The employment growth rate has nearly stagnated. It is the lowest it has been since March. This partly reflected the relatively low level of confidence in business. David Owen, Senior Economist at S&P Global Market Intelligence, said that the most recent survey showed the firms to be the least optimistic for nearly three years. "Although many companies continue to expect that the economic climate will remain favorable and that orders will support activity, concerns about market competition and their potential impact on margins remained." Input costs increased modestly in July, the slowest rate of increase since June. This helped to keep output charges steady for a second month. Dubai, the business and tourism center of the UAE, saw its headline PMI reach a high of 54.5 in nine months, driven by a stronger output and robust consumer demand. Input prices rose at the fastest rate in six months. This led firms to increase their selling prices. Hugh Lawson, Hugh Lawson (Reporting)
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Dalian iron ore falls further on China's demand concerns
Dalian iron ore prices fell for the fourth consecutive session on Wednesday due to concerns over demand in China, the top consumer. This is because of a persistently low manufacturing sector. By 0258 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange(DCE) had fallen 0.9% to 771 Yuan ($108.24) per metric ton. The benchmark December Iron Ore at the Singapore Exchange fell 0.43% to $103.15 per ton. A private sector survey revealed on Monday that China's factory activities in October expanded at slower pace due to a decline in new orders and production as a result of tariff worries. Official data released last week showed that China's manufacturing activity declined for the seventh consecutive month in October. The factory activity fell to 49.0 from 49.8 in August and remained below 50, which separates growth from contraction, due to a decline in new orders. Galaxy Futures, a Chinese broker, predicted that iron ore prices would remain low due to a weakening of steel demand and an increase in domestic inventories since the third quarter. Analysts at ANZ stated that although Hebei, a large steelmaking province in China has reissued a environmental protection alert, these measures are still focused on sintering activities and have not yet affected blast furnace activity. This limits the impact of iron ore on demand. Yet, in a report by Chinese consultancy Mysteel, "China's leading property developers increased their land acquisitions during the first 10 month of 2025. This indicates a cautious recovery in the real estate industry as some developers increase investments amid continuing financial pressures." Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.82% each and 0.34% respectively. All steel benchmarks at the Shanghai Futures Exchange declined. Rebar fell 1.4%, while hot-rolled coils dropped 1.16%. Wire rod fell by 0.12%, and stainless steel declined 0.4%. ($1 = 7.1230 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Oil prices drop amid wider market decline, gains in US crude stocks
The oil prices dropped on Wednesday, amid a global sell-off that reflected concerns over economic growth and fuel demand. A stronger dollar and reports about rising U.S. crude stocks added to the worry. Brent crude futures dropped 36 cents or 0.56% to $64.08 per barrel at 0221 GMT. U.S. West Texas Intermediate Crude was down by 40 cents or 0.66% at $60.16. Both contracts continued to lose money from Tuesday. Oil markets fell as part of an overall slump in equity markets. Asian stock markets added on Wednesday to a drop overnight on Wall Street due to concerns that stock valuations were stretched, especially for companies linked to artificial intelligence. The U.S. Dollar rose against its peers due to the risk-off mood. The stronger dollar makes oil priced in dollars more expensive for holders other currencies. This can affect demand. Tony Sycamore, IG's market analyst, said that crude oil was trading lower as the risk sentiment shifted to a negative direction, boosting the U.S. Dollar, a safe haven currency. Both factors weighed on the price of crude oil. The American Petroleum Institute reported that U.S. crude stocks rose by 6,52 million barrels during the week ending October 31, according market sources who cited the API figures Tuesday. Prices are still being affected by supply-side concerns. OPEC+ (Organisation of Petroleum Exporting Countries) and its allies, also known as OPEC, agreed to raise output by 137,000 barges per day in December. The group decided that it would halt further increases during the first quarter 2026. The pause, however, was "unlikely" to provide meaningful support for November and December prices. LSEG analysts stated in a report. OPEC's own production increased by only 30,000 bpd in October compared to the previous month, as previously agreed OPEC+ increase were offset due to declines in Nigeria Libya and Venezuela.
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Wall St. shaken by fears of stretched valuations, Asian markets retreat
Investors' concerns over stretched valuations eroded confidence in the early trading of Wednesday, as Asian stocks continued to fall overnight on Wall Street. MSCI's broadest Asia-Pacific share index outside Japan fell by 0.8%. South Korean shares were the biggest losers, with a drop of 4.1%. U.S. E-mini Futures fell 0.4% after the S&P500 dropped 1.2% overnight. Chris Weston is the head of research for Pepperstone Group, based in Melbourne. There aren't a lot of reasons to buy, and the market is lacking a catalyst until Nvidia announces its earnings on November 19. The stock market is retreating after reaching record highs, amid fears that equity markets have become stretched. This comes as CEOs from Wall Street giants Morgan Stanley and Goldman Sachs asked whether such valuations could be sustained. Jamie Dimon, CEO of JPMorgan Chase, warned last month of the increased risk of a major correction of the U.S. Stock Market within the next 6 months to 2 years. The warnings coincide with a global surge of enthusiasm for generative AI that has affected stock markets around the world this year. SoftBank Group shares plunged 10%, while Japan's Nikkei index fell 2.5%. After the Bank of Japan released the minutes of its September policy meeting, the U.S. Dollar fell 0.2% to 153.41 yen. The dollar index (which tracks the greenback versus a basket other major trading partners) briefly reached a five-month peak of 100.25. The yield on 10-year Treasury Notes benchmark edged down to 4.0697% from its U.S. closing of 4.091% Tuesday. Bitcoin dropped below $100,000 for first time since last June but recovered and closed the day up 0.2%, at $100,499.70. Gold was up 0.1% at $3,936.48 an ounce after three days of consecutive losses. Early trading saw the euro single currency at $1.1484, after it hit a three-month-low following five consecutive days of declines. Brent crude remained unchanged at $64.44 a barrel. Reporting by Gregor Stuart Hunter Editing done by Shri Navaratnam
Shanghai copper continues to fall as supply concerns and weakening China demand weigh
Shanghai copper prices fell for the fourth consecutive session on Wednesday. Futures hit a record low of more than a week, despite a downward revision in Codelco’s output target for 2025, which still indicated a higher supply next season.
The market was also affected by a weakening Chinese demand, and the strong dollar.
As of 0250 GMT, the most active copper contract at the Shanghai Futures Exchange had fallen 1.25%, to 85,350 Yuan ($11,982.31) a metric ton.
Shanghai copper fell as low as 84.900 yuan per ton in the first session of this week, marking a two-week high since October 22, when it reached 84.500 yuan per ton.
The benchmark copper three-month futures on the London Metal Exchange fell 0.32%, to $10629.5 per ton.
Codelco in Chile, the largest copper producer in the world, has cut its output forecast for 2025, but the new target still exceeds 2024. The first nine months of this year saw an increase in output compared to the same period the previous year.
Analysts at Sucden Financial stated that the forecast was higher than 2024 despite it being adjusted down. This helped ease concerns about a near-term budget deficit "that has been underpinning prices since September".
Copper demand in China remained weak, due to high copper prices. The Yangshan Copper Premium
The U.S. Dollar remained strong and weighed on the copper price, although it did ease slightly on Wednesday.
The strong dollar makes commodities that are traded in dollars more expensive to investors who use other currencies.
Aluminium fell 0.98% among the SHFE base metals. Zinc dropped 0.55%. Nickel tumbled 0.96%. Tin shed 1.24%. Lead was the only one to gain 0.32%.
Wednesday, November 5 DATA/EVENTS (GMT) 0700 Germany Industrial Orders MM Sep 0700 Germany Manufacturing O/P Cur Price SA Sep 0700 German Consumer Goods SA Sep 0850 France HCOB Services, Composite Final PMI Oct 0855 Germany HCOB Services, Composite Final PMI Oct 0900 EU HCOB Services, Composite Final PMI Oct 0930 UK S&P GLOBALPMI: COMPOSITE - OUTPUT Oct 0930 UK Reserve Assets Total October 1400 Wednesday, November 5, DATA/EVENTS, GMT 0700 Germany Industrial orders MM Sep 0700 Germany Manufacturers O/P Cur Price SA Sept 0700 Germany Consumer Goods SA September 0850 France HCOB Services Composite Final PMI October 0855 Germany HCOB Services Composite Final pmI Oct 0900 EU HCOB Services Composite Final pmI Oct 0930 UK S&P GLOBALPMI: COMPOSITE OUTPUT Oct 930 UK Reserve Assets total Oct 1400 US S&P Global Comp
(source: Reuters)