ASX falls; rare earths stocks plunge amid profit taking

The Australian sharemarket fell from a record high on Wednesday after the stunning rally in precious metals hit a wall, sending the gold price tumbling by the most in 12 years, while profit taking also plunged rare stocks into the red.

The S&P/ASX 200 index dropped 64.7 points, or 0.7 per cent, to 9030, just one day after the sharemarket was boosted by Australia’s critical minerals deal with US President Donald Trump.

Materials were by far the weakest of the seven sectors in the red after gold extended its decline on Wednesday, having slumped as much as 6.3 per cent overnight, while silver dropped up to 8.7 per cent, as traders moved to lock in profits.

“Gold has had a spectacular run, but there’s always a battle between where valuations sit and momentum in the market, and we’ve just seen a pause,” said UBS equities executive director Rob Taubman. “There’s no piece of economic news … it’s just hit a threshold and volatility will increase on the commodity as we get into testing really high levels.”

While ANZ and Pepperstone said the long-term drivers for gold remain in place, investors were swift to take some money off the table. Newmont sank 9.6 per cent to $131.36, while Bellevue Gold dropped 9.8 per cent to $1.20, Ramelius Resources 10.2 per cent to $3.52, and Genesis Minerals 10.3 per cent to $5.93.

Rare earths stocks also plunged amid a wave of profit-taking one day after the US and Australia agreed to invest $US3 billion ($4.6 billion) in critical minerals projects, which sent them surging. Arafura tanked 13.5 per cent to 42¢, while Australian Strategic Materials dropped 11.6 per cent to $1.33, Brazilian Rare Earths 7.1 per cent to $5.48, and Australian Rare Earths 10.5 per cent to 26¢.

Those losses were offset by gains in the energy sector, with Woodside up 3.5 per cent to $23.17 after it posted an increase in quarterly production to 50.8 million barrels of oil and raised its output guidance.

Financials were also higher as Pinnacle Investment Management climbed 2.4 per cent to $20.14 on a plan to acquire up to a 13 per cent stake in Advantage Partners, Japan’s largest independent private markets platform. The big four banks were all modestly higher.

Stock in focus

In company news, 4DMedical gained 2.8 per cent to $1.85 after securing its first commercial deployment of CT:VQ at Stanford University, marking the start of its US rollout following Food and Drug Administration clearance of the respiratory imaging technology.

Online luxury retailer Cettire dropped 2.1 per cent to 71¢ despite reporting an 18 per cent lift in revenue outside the US in the September quarter, with the average order value higher at $907. Overall sales revenue still shrank 3 per cent to $150.3 million from the US tariffs.

Sigma Healthcare edged up 0.7 per cent to $3.06 after the pharmacy wholesaling and retail giant that runs the sprawling Chemist Warehouse business reported sales accelerated in the first quarter due to booming demand for weight-loss drugs.

Homewares group Adairs gained 8.3 per cent to $2.36 despite forecasting group sales for the first half to now land between $319.5 million and $331.5 million, slightly below prior guidance.

And Air New Zealand fell 1 per cent to 52¢. The airline expects to post a pre-tax loss in the first half of between $NZ30 million and $NZ55 million because of weaker-than-expected revenue and rising costs.