Iron ore, Australian shares bounce after long losing streaks

Australian stocks and iron ore have finally snapped their losing streaks, rebounding for their first gains in more than a week despite lingering concerns about inflation and rising interest rates.

With investors hopeful the market has bottomed after giving up nearly 7 per cent last week, the S&P-ASX200 rallied 1.4 per cent on Tuesday to close at 6523.8 points following seven straight losing sessions. It remains 12.5 per cent down for 2022.

Singapore iron ore futures, off nearly 25 per cent over the preceding eight days, also recovered some ground, providing relief to the hard-hit Pilbara miners of the steel-making commodity.

Fortescue Metals Group was 3.2 per cent better at $17.535, while Rio Tinto was 1.9 per cent stronger at $103.52 and BHP gained 1 per cent to $40.66.

The trio have been hammered this month, losing a combined $30 billion in value and slumping to multi-week lows, on widening concerns about falling demand for steel in China and the economic impact of the aggressive tightening of interest rates by central banks to stem rampant inflation.

Energy stocks were also better led by Woodside Energy, which added 3 per cent to $31.28.

However, those gains contrasted with sharp falls among Queensland coal miners after the State’s Labor Government revealed new royalty tiers in its Budget that are expected to raise an extra $1.2b over the next four years.

The new structure is aimed at ensuring the Queensland taxpayer benefits from surging prices for coal, with the miners to pay a royalty rate of 20 per cent on prices above $175 a tonne, 30 per cent on prices above $225/t and 40 per cent on prices above $300/t.

Investors belted Queensland coal stocks, with Bowen Coking Coal plunging nearly 38 per cent to 21.5¢, Stanmore Resources shedding 14 per cent to $1.705 and Coronado Global Resources falling 8 per cent to $1.52.

With heat coming out of the battery metals market, lithium shares were also lower. Two of 2021-22’s fast growing stocks, Core Lithium and Lake Resources, dropped 6.5 per cent and 28.4 per cent respectively.