Australian share market sinks as crude oil, iron ore prices slump

Following a drop in oil prices after the delay of an OPEC+ meeting and a decline in iron ore prices, the Australian share market lost ground on Thursday.

The Australian share market ended lower on Thursday as falls in iron ore and crude oil prices dragged the benchmark lower.

The benchmark S & P/ASX200 lost 0.6 per cent, or 44.2 points to 7,029.2. Meanwhile, the All Ordinaries sank the same amount to close at 7,234.1.

The Australian dollar is higher, buying US66c.

Oil prices fell nearly 1 per cent in a volatile session overnight as OPEC+ producers unexpectedly delayed talks on production cuts to the end of the month following disputes over quotas among members, reducing expectations of a fresh intervention to tighten oil supplies.

Global benchmark Brent crude is trading close to $US81 a barrel, while West Texas Intermediate is sitting just above $US76 a barrel.

Sector heavyweights Santos lost 1.6 per cent to $7.01 and Woodside fell a similar amount to $31.54.

Energy stocks tracked falls in global crude oil prices. Picture: Frederic J. Brown / AFP

Karen Jorritsma, head of Australian equities at RBC Capital Markets said the rise in US crude inventories was also putting downward pressure on prices for the commodity.

“Add in the rising US stockpile, that’s why oil is off at the moment,” she said.

The material sector also finished lower, tracking a slight fall in iron prices which are still sitting above $US130 a tonne. BHP shaved off 1.5 per cent to $47.15, Rio Tinto sank 1 per cent to $126.50, and Fortescue slumped 1.9 per cent to $24.95.

Telecommunications shares were the strongest gainers, rising 0.2 per cent. Interest rate sensitive real estate stocks also finished in the green, rising 0.1 per cent.

Singaporean iron ore futures sank 2.4 per cent to $US131 a tonne but are still trading at their highest levels since February. Picture by: Rebecca Le May

It follows a more hawkish address by Reserve Bank governor Michele Bullock last night who pushed back against the perception that Australia’s inflationary pressures are overwhelmingly imported.

“An important implication of this homegrown and demand-driven component to inflation is that getting inflation back to target will take time,” Ms Bullock said on Wednesday evening to the Australian Business Economists annual dinner.

Ms Jorritsma said the comments added to market sentiment that a further monetary tightening could be on the cards.

“From our perspective, we’re still forecasting that there’s a ‘live’ meeting in February,” Ms Jorritsma added.

Despite the two-day losing streak, Ms Jorritsma added the local sharemarket was “continuing to find itself in a relatively good spot”.

“The markets had this little tick-up post October and it’s continuing to hold that level, which I think is really positive,” she said.

In company news, AMP shares vaulted 6.5 per cent to 91c, the most since April 2022, after the investment manager announced it had reached an agreement worth $100 million to settle a class action brought on behalf of certain advice practices authorised by AMP Financial Planning.

Markets reacted positively to the news that AMP had agreed to settle a class action. Picture: NCA NewsWire / Steven Saphore

Following a revised takeover offer from a Brookfield-led consortium, Origin has deferred a shareholder meeting scheduled for Thursday afternoon to December 4. Shares were 1.8 per cent lower to $8.28 after a trading halt ended on Thursday morning.

Shares in telecom provider TPG fell 0.4 per cent to $4.66 after the firm announced it had purchased new licences in the 3.7 GHz spectrum band for $128.2 million at an auction held by the Australian Communications and Media Authority (ACMA).

Furnishings retailer Nick Scali plunged 6.3 per cent to $10.89 after it was revealed that its chief executive, Anthony Scali, had sold $50 million worth of his shares in the business.

Originally published as Australian share market sinks as crude oil, iron ore prices slump