By Harshita Swaminathan
November 14 (Reuters) – Australian stocks closed slightly lower on Monday, reversing price action from nearly five-month highs earlier in the session as profit-taking in financial stocks more than offset a rally in commodity-related stocks after the China has eased some restrictions related to COVID-19.
The S&P/ASX 200 Index .AXJO closed down 0.2% or 11.7 points at 7,146.3. The index had risen 0.54% to 7196.5, its highest level since June 7, earlier in the day.
The index was largely put under pressure by a 1% drop in financial stocks .AXFJwith leading lender Commonwealth Bank of Australia’s ABC.AX 0.7% drop the largest drag.
“(Banks and defensive stocks) had a pretty good run, but obviously there’s some concern because they may have gotten a bit ahead of themselves when it comes to the Federal Reserve and the fulcrum,” said Henry Jennings, principal analyst and portfolio manager. to Marcustoday’s financial newsletter.
The benchmark closed 2.8% higher on Friday, with banks advancing 2.1%, amid a global rally after data showed US inflation in October hit its lowest since January, fueling hopes that the Fed could become less hawkish.
However, a central bank official has since put a damper on optimism.
“I think there’s just some profit taking in some of these industries and maybe some of that money is going into the resource sector,” Jennings added.
Local mining .AXMM and energy values .AXEJ rose 3.7% and 0.9%, respectively, as China relaxed some COVID-19 brakes, boosting demand expectations for commodities such as iron ore and oil. IRON-ORE/WHERE
Heavy Miners BHP Group BHP.AXRio Tinto RIO.AX and Fortescue Metals Group FMG.AX ended 3.3% to 10.1% higher. champion iron CIA.AX led the mining and benchmark indexes, up 12.9%.
Agribusiness Elders Ltd ELD.AX plunged 22.9% and was the biggest loser in the index after reporting headwinds to the season’s harvest due to flooding caused by extreme rainfall.
In New Zealand, the benchmark S&P/NZX 50 .NZ50 fell 0.7% or 79.79 points to 11,231.97.
(Reporting by Harshita Swaminathan, additional reporting by Nausheen Thusoo; Editing by Savio D’Souza)
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