‘Sputtering’ Chinese building and manufacturing weighs down Aussie miners

The financials and energy sectors have dragged the ASX to a winning day as Chinese woes weigh heavy on Australian miners.

Ineffective stimulus from the Chinese government on the country’s ailing property sector continues to weigh down Australian iron ore equities.

The ASX materials sector lost the most ground on Monday’s trading, though seven of the 11 sectors were in the green.

The benchmark ASX200 gained 18 points to 8,109.9, for a 0.22 per cent gain.

The All Ords was up 0.17 per cent to 8,330.8.

While US jobs data on Friday could affirm how deeply the Federal Reserve cuts rates this year, data out of China puts the Australian market between a rock and a bullish place.

Key Australian inflation data is keenly awaited on Wednesday. Picture: NewsWire / Gaye Gerard

Late on Friday a key Chinese residential property firm reported its first half-year loss in more than 20 years, and on Monday the ASX materials sector took a subsequent hit.

BHP, Fortescue, Rio Tinto, Northern Star, South32 and Newmont Corp. all lost between 0.49 and 1.44 per cent for the day. Iron ore prices are down 11 per cent in the past six months.

Pilbara Minerals is down 39 per cent for the year, and opened the historically volatile month of September with a 4.3 per cent loss to $2.84.

Pilbara Minerals posted 89 per cent dive in annual net profit after tax last week. Picture: Supplied

Evolution Mining (-3 per cent) and Mineral Resources (-1.5 per cent) took a hit too.

The ASX All Ordinaries Gold benchmark lost 2.59 per cent, despite gold futures gaining 0.1 per cent overnight.

Commonwealth Bank reached an intraday record high and settled just a few cents down from that for a record high closing price of $141.77. The financials and energy sectors gained 1.1 per cent each.

Elsewhere advertiser REA Group (which NewsWire publisher News Corp owns 61.4 per cent) slumped 5.2 per cent on news of possible takeover activity.

After chief executive Matt Comyn batted away Greens’ corporate tax reforms last week, Commonwealth Bank reached a record high shareprice on Monday. Picture: NewsWire / Martin Ollman

Trading was halted minutes before the opening, with the REA board then confirming a possible takeover bid but saying it still had “not approached, nor had any discussions with Rightmove, regarding any potential offer”.

FTSE 100-listed Rightmove has a similar business in the UK as REA Group does in Australia, and a market cap about one-quarter the size.

Closer to home, on Sunday Treasurer Jim Chalmers said the ­Reserve Bank was “smashing the economy” with its run of rate hikes. On Monday he denied he was trying to influence the RBA.

Fortescue is down 10 per cent on this time last year. Picture NewsWire / Sharon Smith

“That’s not an opinion. That is very clear from the data. That’s not taking a shot at anyone. That’s just recognising the facts of our economy right now,” the Treasurer said.

Global markets have all-but pencilled a US rate cut this year, but China’s ailing property sector was a thorn in the side for many, independent analyst Stephen Innes says.

“China continues to play the role of buzzkill in the global Goldilocks scenario,” Mr Innes said.

“The world’s second-largest economy is sputtering, with factory activity lagging, deflationary pressures mounting, and the call for stimulus growing louder.

The ASX All Ordinaries Gold benchmark lost 2.59 per cent on Monday.

“Manufacturing hit a six-month low, shrinking for the fourth consecutive month as factory gate prices tumbled and orders dried up.”

The 39 companies which make the ASX200 materials sector are down 8 per cent on this time 12 months ago.

In commodities markets, the Organisation of the Petroleum Exporting Countries signalled it would push up output in October, and the price of crude was down 0.4 per cent to US$73.25.

On Wednesday Australia’s latest quarterly GDP data drops late morning, and on Friday US jobs data will set the tone for how drastically the Fed cuts rates.