Australian Shares End Marginally Lower as Investors Were Weighed Down by a Decline in Commodity Prices

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Weak economic statistics from China due to the country’s strict COVID-19 restrictions stoked worries of a worldwide recession.

On January 10, the Australian shares trading “ended marginally down as gains in healthcare firms more than outweighed losses in the mining and gold indexes,” according to a recent market analysis.

A four-day surge was halted when the S&P/ASX 200 index finished 0.03 per cent lower at 7,386.3. Monday saw a 0.8 per cent increase in the benchmark.

As severe COVID regulations caused a dent in economic activity and stoked worries of a worldwide downturn, China, Australia’s largest trading partner, posted one of its weakest GDP growth rates for 2022 in almost half a century, increasing 2.9 per cent in the October-December quarter.

“Putting aside the GDP data today, which confirmed a substantial slowing of the Chinese economy, the broader flow of data has been disappointing, such as continued fall in property prices and deterioration in trade,” ThinkMarkets Australia market analyst Carl Capolingua said.

With index giants BHP Group and Fortescue Metals declining by roughly 1.1 per cent and 1.3 per cent, respectively, mining companies had the largest declines, falling 1.3 per cent as sentiment for the ingredient used to make steel was dampened by the weak economic development.

After implying that China’s reopening from COVID limitations was poised to increase near-term risks of labor and supply chain constraints, the Anglo-Australian mining company Rio Tinto saw its share price fall by 1.2 per cent.

Additionally, the price of gold equities dropped by 1.8 per cent, with market leaders Newcrest Mining and Northern Star Resources trading 1.8 per cent and 1.5 per cent lower.

With CSL Ltd. increasing by 1.3 per cent, the healthcare index was the only one to show a significant rise of almost 1 per cent.

After extending the exclusivity period for a second attempt to complete a A$15.5 billion ($10.80 billion) purchase offer from a Brookfield-led consortium, Origin Energy’s stock slumped 2.1 per cent.

Overall, investors remain concerned about the economic impact of the coronavirus pandemic, with shrinking services sectors in major economies spurring fears of an impending global recession.

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