Copper miners keep Australian shares afloat
Australian shares ended slightly higher on Thursday, as a rally in copper miners due to a sharp jump in metal prices countered losses in other sectors after markets trimmed bets for imminent interest rate cuts.
The S&P/ASX 200 benchmark index closed 8.5 points higher at 8 773. The benchmark fell 0.9% on Wednesday.
Copper prices in Shanghai jumped to their highest in six months after Freeport-McMoran declared force majeure at its Grasberg mine in Indonesia, which investors expect will tighten supply and bolster prices.
Shares of iron-ore miners Rio Tinto and BHP, which are pivoting towards copper, rose 3.6% each. Fortescue, which only produces iron-ore, ended flat.
Sandfire Resources, a major copper producer in Australia, soared about 8% to post a record closing high. It earlier jumped 12.7% to an all-time high of A$14.30.
This helped the mining sub-index climb to its highest level in nearly 21 months.
Daniel Morgan, a mining equity analyst at Barrenjoey, said the force majeure event will have a big impact on the copper market beyond just the next 12 months.
"It's a big outage (that has) caused the copper price to spark, which in turn has caused the copper equities to rally," Morgan said.
"Sandfire Resources is a benchmark local copper producer with reasonably healthy margins. This incident, however unfortunate, will cause Sandfire to earn more money."
Pressuring other sectors on the bourse was expectation of a long-drawn out easing cycle in Australia than previously anticipated following a strong monthly inflation report on Wednesday.
Financials slipped 0.3%. Top lender Commonwealth Bank of Australia dropped 0.5%, hovering near a five-month low.
Gold stocks slipped further from the record high touched earlier this week, while the consumer staples gauge fell to its lowest since early April.
New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.2% to 13,153.79.
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