Energy sector shines as Australian market dips amid rate concerns

  • Stock Market News
Energy sector shines as Australian market dips amid rate concerns
Credit: © Reuters.

The Australian Securities Exchange (ASX) experienced a broad decline on Tuesday, with the energy sector being the only one to close higher. Local shares fell by almost half a percent as gains in energy were offset by losses across other sectors. The Reserve Bank of Australia's (RBA) September minutes, released on the same day, revealed that board members decided to hold rates steady at the September meeting due to significant increases in interest rates over a short period.

Energy stocks rallied as crude prices continued their upward trend for the third consecutive week, with Brent trading at US$94.80. Chevron (NYSE: CVX )'s Mike Wirth anticipates it reaching $US100 a barrel soon. "Supply is tightening, inventories are drawing … the trends would suggest, we are certainly on our way, we are getting close to $100 a barrel,” Wirth said in an interview on Monday.

Coal stocks also saw an increase after New Hope (OTC: NHPEF ) (ASX:NHC), a sector leader, reported an "exceptional" performance across its businesses resulting in a full-year profit of A$1.09 billion. The company also noted that its New Acland stage 3 operations began in May and produced its first coal earlier this month.

Gold stocks surged as bullion prices hit a two-week high due to the easing US dollar ahead of the two-day Federal Reserve meeting starting later on Tuesday. Among these, Newcrest Mining (OTC: NCMGF ) (ASX:NCM) advanced after receiving approval from Australia's Foreign Investment Review Board (FIRB) for Colorado-based giant Newmont's planned acquisition.

However, some stocks didn't fare as well. Lithium stocks Pilbara Minerals (ASX:PLS) and Allkem (ASX:AKE), along with payments stock Block Inc (ASX:SQ2), each saw losses of 4%.

Elsewhere in Asia, stocks mainly dropped due to concerns that the Federal Reserve and Bank of England would hike rates this week. The S&P/ASX 200 index fell 0.5% to 7,197 after a 0.7% drop the day before. Heavyweight mining stocks slid, with BHP down 1.4% and Rio Tinto (NYSE: RIO ) slipping 0.65%; iron ore futures extended declines on China's higher domestic supply and demand concerns.

In other company news, Orica (ASX:ORI) announced accelerated climate change targets, including a goal to reduce net operational Scope 1 and 2 emissions by at least 45% by 2030, up from its previous target of 40%. The company also aims to reduce Scope 3 emissions by 25% by 2035, from 2022 baseline levels.

Meanwhile, logistics group Qube Holdings (ASX:QUB) saw a decline after disclosing a fatal accident involving an employee at its forestry harvesting operations in the Fleurieu Peninsula on Monday. The company is now working with South Australian Police, SafeWork SA, and other relevant authorities investigating the incident.

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