Less than a week out from Christmas and there is no sign of the alleged ‘Santa rally’ markets were hoping for.
While US equities lifted modestly following positive labour data, the S&P/ASX 200 opened lower. Meanwhile, the strong US dollar and weak China outlook saw nickel take a beating.
“Nickel was caught up in the selloff despite signs that low prices are finally having their impact on supply,” ANZ economists say in a research note on Friday (20 December).
“Indonesia is said to be considering deep cuts to nickel mining quotas as it seeks to boost slumping prices of the metal.”
Bloomberg reports that the world’s largest nickel producer is looking to cut the amount of nickel mined next year to 150 million tonnes, which ANZ says would be a sharp drop from the estimated 272 million tonnes produced in 2024.
Nickel slid 2.5% to US$15,113 ($24.239) a tonne.
The S&P/ASX 200 fell 70.30 points, or 0.86%, to 8,097.90 points as of 10.32am AEDT, setting a new 20-day low. The index has lost 2.39% over the last five days, and sits 4.89% below its 52-week high.
Six of the 11 sectors climbed higher. Industrials rose 0.17% and utilities was up 0.09%. However, materials was not among the gainers, with the sector edging back 0.54%.
The bottom five were all miners, largely the gold producers. Bellevue Gold (ASX:BGL) dipped 3% to $1.14, Perseus Mining (ASX:PRU) fell 2.64% to $2.58, Genesis Minerals (ASX:GMD) retreated 2.36% to $2.48 and Emerald Resources (ASX:EMR) decreased 2.3% to $3.40.
Coal producer Coronado Global Resources (ASX:CRN) dropped 2.69% to $0.73.
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
