A resurgence in iron ore prices is shielding the Australian sharemarket from the impact of US President Donald Trump’s latest tariff announcements, prompting a shift from Commonwealth Bank towards major mining companies. Iron ore futures in Singapore experienced a rally, climbing approximately 4 per cent last week to $US99.50 a tonne, marking its third consecutive week of gains – the strongest performance since January.
BHP shares have risen by 10.4 per cent in the last three weeks, while Rio Tinto has increased by 9.1 per cent and Fortescue by 16.8 per cent. This surge in mining stocks has occurred simultaneously with a decline in Commonwealth Bank shares, which have fallen by 2.6 per cent during the same period, despite gains among other major banks. Commonwealth Bank is one of Australia’s largest providers of financial services. The company offers a wide range of products and services, including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services.
The iron ore rally has been influenced by social media speculation regarding a high-level meeting in China, drawing comparisons to the Central Urban Work Conference in 2015, which spurred significant infrastructure development. However, Westpac’s head of commodity strategy, Robert Rennie, expressed doubt about the validity of these rumours. Australian miners are also urging Prime Minister Anthony Albanese to safeguard iron ore sales to China during upcoming talks in Beijing.
Despite this positive momentum, ASX futures indicate a slight dip at the open. Investors are now focusing on Wall Street’s second-quarter earnings season, with financial giants like JPMorgan, Citi, and BlackRock set to release their results this week. Markets will also be closely watching the release of US inflation figures, expected to reveal rising consumer prices due to the impact of tariffs.
