Highlights

  • The Australian sharemarket closed lower as resources and banking shares retreated ahead of an expected Reserve Bank rate hike.
  • Mining heavyweights BHP and Rio Tinto eased as copper weakened on concerns that heavy artificial intelligence spending may not deliver adequate returns.
  • Westpac warned of a steep housing downturn but its annual adjusted profit met expectations, and its shares closed higher.

Resources shares remain central to the performance of the Australian sharemarket, and movements in copper are increasingly shaping sentiment across Metal and Mining Stocks on the ASX. At the start of the week, the benchmark S&P/ASX index closed lower as miners and banks retreated, according to a market report. Diversified miners BHP Group (ASX:BHP) and Rio Tinto (ASX:RIO) eased as copper prices softened amid doubts over returns from heavy spending on artificial intelligence, while Westpac Banking Corporation (ASX:WBC) drew attention with its annual result. The session unfolded as Market Participants braced for a further Interest Rate increase by the Reserve Bank of Australia, adding to caution across rate-sensitive and cyclical sectors.Metal and Mining Stocks

Resources Sector Retreats Alongside Copper

The resources sub-index extended its losing streak to another session, mirroring weakness in copper prices. Healthcare shares also declined, while energy stocks were only marginally lower, leaving few corners of the market to offset the weakness in miners and financials. Across the Tasman, New Zealand's benchmark index also eased.

Copper has been supported by expectations that technology-related infrastructure, including data centres and the power networks that serve them, will require substantial quantities of the metal. However, concerns that the scale of artificial intelligence spending may not generate sufficient returns have weighed on that narrative in recent sessions.

BHP Group (ASX:BHP) and Rio Tinto (ASX:RIO) Track the Copper Move

BHP and Rio Tinto, major diversified miners whose share prices carry considerable weight in the local market, both closed lower during the session. The report did not attribute the moves to company-specific announcements, instead linking them to the broader shift in copper sentiment.

EToro analyst Josh Gilbert said copper has become a proxy for the artificial intelligence build-out, so it tends to fall when chip stocks slide, and that this explained most of the move in miners during the session. Both companies have meaningful copper exposure alongside their iron ore businesses, which places them in the path of shifts in copper sentiment.

Westpac (ASX:WBC) Result and the Banking Sector

Banking shares gave up early gains to finish lower. Westpac warned of a housing downturn steeper than any seen in many years, and its Credit Impairment charges rose sharply, although its annual adjusted profit met market expectations. Westpac shares recovered from an intraday decline to close higher, while the other major banks finished lower.

According to the report, Mortgage applications at major lenders have fallen after the Australian Government removed property tax concessions earlier in the year, alongside a series of rate increases. These conditions are being closely watched for their effect on lending growth and credit quality.

Reserve Bank Rate Expectations in Focus

A poll pointed to the Reserve Bank of Australia raising the cash rate again this year, which would take borrowing costs to their highest level since the global financial crisis era. The expected move reflects stubborn inflation, even as the labour market shows signs of softening.

Gilbert said the board had little choice at its upcoming meeting and expected it to leave the door open to further tightening. Higher rates can weigh on Equity valuations generally, and particularly on interest rate-sensitive sectors such as banking and property.

Commodity and Sector Trends to Watch

For the mining sector, copper's growing link to technology spending adds a new source of Volatility to a metal traditionally driven by construction, Manufacturing and electrification demand. Shifts in sentiment towards artificial intelligence and semiconductor shares can therefore spill over into the share prices of copper-exposed miners on the ASX.

At the same time, longer-term electrification and grid expansion themes continue to underpin interest in the metal. Iron ore, which remains a major Earnings driver for the largest Australian miners, is influenced separately by conditions in the Chinese steel sector.

Risks Facing Miners and Banks

Key risks include further copper price volatility tied to technology sentiment, the pace of Reserve Bank tightening and its effect on economic activity, and a softer housing market that could pressure bank credit quality. Global trade policy and Chinese Demand also remain important considerations for the resources sector.

Copper Sentiment and Rate Fears Weigh on the ASX

The Australian sharemarket eased as miners including BHP and Rio Tinto tracked weaker copper prices tied to doubts over artificial intelligence spending, while banks retreated ahead of an expected rate hike despite Westpac's result meeting expectations. The session highlights how technology sentiment, Monetary Policy and housing conditions are intersecting across major ASX sectors, with copper's role as a proxy for technology infrastructure becoming an increasingly important influence on Australian mining shares.