The Australian Securities Exchange (ASX) has backed off its record run with several geopolitical events shifting the switch to risk off.
The S&P/ASX200 slid 30.10 points, or 0.35%, to 8,465.10 points at 10.31am AEDT today (4 December).
ANZ says markets are in a “risk-off mode” following the surprise announcement of martial law by South Korean President Yoon Suk Yeol.
“This is the first time since 1980 that South Korea has declared martial law, injecting uncertainty into the region,” analysts Adelaide Timbrell, Brian Martin and Daniel Hynes say in a research note today (4 December).
“However, both the ruling and opposition parties have voted against the moving to martial law which would put the country under military control, and authorities pledged to support financial markets which helped markets recover.”
Meanwhile, China has made another move in its tariff war with the US, banning the export of critical minerals gallium, germanium and antimony to the US.
North American antimony explorer Military Metals (CSE:MILI) says the move underscores the urgent need for Western nations to secure reliable long-term sources of these essential materials.
China’s ban, coupled with existing restrictions that came into effect in mid-September, has already seen antimony prices spike over 228% this year.
Military Metals says the ban comes at a time when defence sector inventories are at already “concerningly low levels”.
“The West can no longer afford to rely on adversarial nations for resources essential to our security and economic stability,” CEO Scott Eldridge says.
“We are taking proactive steps to meet this growing demand with future domestic and allied sources of antimony.”
Gold edged higher on the emerging geopolitical risks.
Investors are also waiting on the outcome of US nonfarm payrolls data to get a better idea of the US Federal Reserve’s decision on rate cuts at the upcoming meeting.
“The market is pricing 70% possibility of a rate cut,” ANZ says.
Eight of 11 sectors started the trading session lower. Materials was the outlier this morning, advancing 0.55% since the opening bell and gaining 1.75% over the past five days.
The top five movers were led by Lynas Rare Earths (ASX:LYC), which rallied 4.38% to $7.28. Champion Iron (ASX:CIA) jumped 3.36% to around $6 and Evolution Mining (ASX:EVN) climbed 2.25% to $5 in early trade.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & iStock
