Australian stocks open lower as BHP falls; JB Hi-Fi wins

Australian stocks opened slightly lower on Tuesday as a fall in iron ore prices weighed on local miners and US futures pointed lower as Wall Street was closed for a holiday.

The S&P/ASX 200 fell 14.6 points, or 0.2 percent, to 7373.6 on open, with commodity and utility stocks leading the market lower. However, the local exchange pared its losses by mid-morning, trading largely unchanged at 7392.30 by 11:25 AEDT.

BHP, the largest stock in the S&P/ASX 200, fell as iron ore prices fell overnight.

BHP, the largest stock in the S&P/ASX 200, fell as iron ore prices fell overnight.Credit:Krystle Wright

Iron ore prices fell 1.75 percent on news that China would tighten surveillance of iron ore prices, leading mining heavyweights BHP, down 1.5 percent, and Fortescue Metals Group, down 2.4 percent, to charged. Coal miners Whitehaven Coal, New Hope Corporation and Yancoal also fell 4.5 percent, 3.7 percent and 3.4 percent, respectively.

Health care remained in the green, up 1.3 percent, led by medical technology company Resmed, which rose 2.9 percent.

Consumer electronics retailer JB Hi-Fi led gains for retailers, up 3.4 percent after posting record profits and sales for the half-year.

The MSCI ACWI Index, a measure of global equities, faltered after its best start to the year in a generation as investors assessed whether the rally had gone too far given the outlook for inflation, growth and earnings.

Meanwhile, US spot markets were closed for a holiday, but futures on the S&P 500 and Nasdaq 100 indexes each fell at least 0.2 percent, the 10-year Treasury yield was little changed at 3.50 percent, and the US -Dollar snapped at three -day losing streak. European stocks were boosted by gains at real estate companies.

While US inflation appears to have peaked, there is a risk that aggressive monetary tightening by the Federal Reserve and other central banks could push the global economy into a recession that could hurt corporate profits. Adding to the bleak outlook last week, the World Bank warned of “one of the sharpest slowdowns we’ve seen in five decades.”

“It’s been quite a hectic start to the year, so investors may be taking the opportunity to catch their breath,” wrote Craig Erlam, a senior market analyst at Oanda Europe, in a note. “The question now is whether earnings season will add to this new sense of hope or spoil the party before it really gets going. A poor earnings season could undermine hopes for a soft landing, which seems more likely now than it has been for many months.” Australian stocks open lower as BHP falls; JB Hi-Fi wins

Brian Lowry

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