The Australian share market is trading lower at lunchtime, with heavyweight mining stocks weighing on the index as investors react to softer commodity prices and wait for this week’s US Federal Reserve interest rate decision. With the materials sector such a large part of the ASX 200, moves in iron ore, copper and gold can quickly flow through to the broader market.

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The ASX 200 is down 0.3 per cent, with weakness concentrated in the materials sector. Markets are also monitoring developments in the Middle East after President Donald Trump said the US and Iran are engaged in talks to end the conflict. That has helped push Brent crude below US$88 a barrel after Monday’s sharp sell-off.

Copper has also eased, while gold has slipped to around US$4,046 an ounce as investors await the Fed’s rate decision.

Mining stocks are leading the market lower. BHP has fallen 2.5 per cent, Rio Tinto is down 2.8 per cent, Newmont has dropped 3.7 per cent and Northern Star is off 2 per cent as lower metals prices weigh on the sector. The pullback in those large-cap names is doing most of the damage to the index, even as other parts of the market hold up better.

Utilities are also weaker. Origin Energy has fallen 1.1 per cent after confirming around 900,000 customers were affected by last week’s data breach, while APA Group has slipped 0.9 per cent.

Energy stocks are mixed following the retreat in oil prices. Woodside Energy has edged 0.8 per cent higher and Beach Energy has gained 2 per cent, while Santos is slightly lower.

One standout is Viva Energy, which has surged almost 5 per cent after forecasting first-half earnings of between $770 million and $780 million, driven by stronger regional refining margins during the recent Middle East conflict.

Consumer discretionary is the strongest sector, with investors buying into gaming stocks. Aristocrat and The Lottery Corporation have both gained more than 2 per cent, while Light & Wonder is also trading higher.

The major banks are providing some support, with Commonwealth Bank, National Australia Bank and ANZ all posting modest gains, while Westpac is little changed.

In company news, DroneShield has tumbled more than 12 per cent after warning first-half gross margins will come under pressure.

Web Travel has jumped 12.5 per cent after announcing a share buyback of up to $90 million and forecasting stronger first-half earnings.

Harvey Norman is higher despite being fined $35 million by the Federal Court over a misleading advertising campaign involving Latitude Financial.

IGO has edged higher after reporting a stronger balance sheet and improved free cash flow at the end of the financial year.

Iluka Resources has rallied 4.5 per cent despite lowering production expectations for its Balranald project following commissioning delays.

Whitehaven Coal is lower after finishing the financial year at the top end of production guidance.

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