Australian shares slip as Fortescue, Santos drag; banks rise

By Reuters News

By Aamir Khalid

- Australian shares slipped on Thursday as Fortescue's operational challenges and Santos' weak guidance weighed on heavyweight mining and energy stocks, while strength in financials helped pare losses.

The benchmark S&P/ASX 200 index .AXJO ended 0.4% lower at 8,793.20 points.

Fortescue FMG.AX, the world's fourth-largest iron ore miner, flagged potential disruptions to its operations if negotiations with its state-backed Chinese buyer are not resolved by year-end, while its quarterly update showed sales lagging shipments.

The company's shares fell as much as 4.7%, their steepest decline in over a year, dragging miners .AXMM 2%.

BHP Group BHP.AX and Rio Tinto RIO.AX shed 2.4% and 1.5%, respectively.

In energy, Santos STO.AX tightened its 2026 production and sales volume forecast, citing temporary disruptions at its Pikka oil project in Alaska.

Australia's second-largest independent oil and gas producer slipped 1.3%, its worst session since early October.

Woodside Energy WDS.AX also tumbled 3.5%, a day after it trimmed its output forecast.

Both dragged the energy sub-index .AXEJ down 2.4%.

"Investors are focused on execution risks and softer production outlooks, while treating the current oil-price strength as potentially temporary rather than fully sustainable," said Philip Pepe, senior equities analyst at Shaw and Partners.

Gold stocks .AXGD tanked 2% after an overnight drop in bullion prices. GOL/

Financials .AXFJ, however, rose 0.4%, with the "Big Four" trading in the green.

"Investors have been using banks as a safe-haven asset in recent times when market volatility heightens, and outlook becomes more murky," said Grady Wulff, a senior market analyst at Bell Direct.

In other company news, biotech giant CSL CSL.AX faced a shareholder class action over claims tied to its financial forecasts, a day after it announced its new CEO, Deborah Waterhouse.

The New Zealand benchmark S&P/NZX 50 index .NZ50 fell 0.1% to 13,746.84 points. The country's inflation data came in a shade under forecasts as investors brace for the central bank's rate decision due next week.

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