CAPITAL MARKETS

ASX drops below 5200

MINING companies held their ground as the broader market sank into negative territory.

Justin Niessner

The S&P/ASX 200 traded down in the 5240-5250 range for most of the day before an afternoon slump led the index to a 1.4% lower close at 5198 points.

Technology and financial stocks led the decline, with most analyst buzz focusing on an 11.2% dive from Qantas.

The resources industry, however, appeared mostly above the fray, as the basic materials sector recorded the best performance, only 0.1% lower on the session.

BHP Billiton was down 0.05% to $A36.78 and Rio Tinto lost 0.4% to $66.

Iron ore companies were mostly higher as the commodity floated on a three-month high at about $US139.70 per tonne on reports of Chinese restocking activity.

Sherwin Iron was a standout with a 20% surge to A9.6c, with a changing directorship as the company transitions from development to operational phases.

Western Australian explorer Athena Resources was also conspicuous, bouncing 50% to 4.8c.

Gold companies were mostly firmer even as recent price movements betrayed mounting speculation about US stimulus tapering and lost faith in the precious metal, which fell more than 25% this year in value.

Spot gold was last trading at about $US1239 per ounce.

Gold One International continued to be one of the strong performers with an 8.3% gain to A19.5c, followed by Primero Mining, which improved 6.8% to $5.32.

Metaliko Resources and Tanami Gold were among the biggest gold winners in percentage terms, up 22.2% to 1.1 and 20% to 2.4c respectively.

Copper companies, however, were mostly subdued despite a 2% spike in the price of the red metal to $US7091/t.

PanAust was in form with a 9.3% rise to $A1.58 but Pegasus Metals dropped 18.4% to 4c while Phoenix Copper, KBL Mining, Marengo Mining and YTC Resources posted falls of 5% or more.

The Australian dollar was last trading at US90.40c.

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