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Australian equities ended lower for a third consecutive session as weakness in mining and gold stocks weighed on the broader market. Falling iron ore prices and concerns over subdued steel demand in China pressured major resource companies, leading the benchmark index to close in negative territory despite a late recovery. Gains in consumer staples, real estate and healthcare stocks helped limit losses. Investors also remained focused on the outlook for interest rates, with markets increasingly expecting the Reserve Bank of Australia to keep rates unchanged in the near term. Meanwhile, New Zealand equities recorded their strongest session in about three weeks.
Australian stocks closed slightly lower in the latest trading session, marking a third straight day of declines as losses in the mining sector outweighed gains across consumer, healthcare and real estate stocks.
The benchmark S&P/ASX 200 index ended 0.2% lower at 8,604.2 points after recovering from a sharper intraday decline of as much as 1.6%. Trading resumed after a market holiday at the start of the week.
Mining stocks were the biggest drag on the market, with the sector falling 2.5% to its lowest level in nearly three weeks. The decline followed weaker iron ore prices, driven by soft steel demand in China, which remains Australia's largest trading partner and a key consumer of the commodity.
Major miners Rio Tinto and BHP fell 1.8% and 1.9%, respectively, reflecting investor concerns over commodity demand and pricing trends. The mining sector has remained sensitive to economic activity in China, where the property and construction sectors continue to influence steel consumption and raw material demand.
Gold stocks also faced significant selling pressure, with the sector dropping 4% to its lowest level since late March. Evolution Mining declined 3.7%, while Northern Star Resources lost 3.3%. The weakness came as gold prices softened, reducing support for mining companies exposed to the precious metal.
Partly offsetting these declines, consumer staples stocks advanced 1.5%. Major supermarket operators Woolworths and Coles recorded gains ranging between 1% and 3%, supported by investor preference for defensive sectors during periods of market uncertainty.
Real estate stocks emerged among the better-performing sectors, rising 1.2%. Charter Hall Retail REIT and Dexus both gained more than 1%, reflecting continued investor interest in property-linked assets amid expectations that borrowing costs may have peaked.
Market attention also remained on the outlook for monetary policy. Sally Auld, Chief Economist at NAB, indicated that the bank no longer expects the Reserve Bank of Australia to raise interest rates by 25 basis points in August and now expects the cash rate to peak at its current level of 4.35% during this cycle. She further noted that the next movement in rates is likely to be downward, although the timing remains uncertain.
Interest-rate swaps currently suggest that the Reserve Bank of Australia is expected to keep the benchmark cash rate unchanged at 4.35% at its upcoming policy meeting, following three rate increases earlier this year.
The financial sector finished largely unchanged. Among Australia's four largest banks, ANZ was the only lender to end the session in positive territory, while the broader financial index remained flat.
Healthcare stocks provided additional support to the market, gaining 1.3%, while energy shares slipped 0.2% in line with softer global oil prices.
Energy markets came under pressure after Iran and Israel indicated that hostilities had been halted following an appeal by U.S. President Donald Trump, easing concerns over potential supply disruptions in the region and weighing on crude oil prices.
Across the Tasman Sea, New Zealand equities outperformed regional peers. The S&P/NZX 50 index rose 1.3% to close at 13,204.08 points, recording its strongest single-session gain in approximately three weeks.
Source Reuters
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