Australian shares closed lower on Monday, dragged by tech and gold stocks, with investors now eyeing the Reserve Bank of Australia’s policy meeting where it is expected to raise interest rates.
The S&P/ASX 200 index ended 0.45% lower at 7,206.3. The benchmark had risen 0.8% on Friday and marked a third straight weekly gain.
Ahead of the RBA’s meeting on June 7, financial stocks dropped 0.6%, with the so-called “Big Four” banks declining nearly 1% each.
“There is a bit of caution in the market because of the likely rate hike in Australia tomorrow,” said Steven Daghlian, a market analyst at CommSec.
The central bank is expected to hike rates by a modest 25 basis points (bps) for a second straight meeting, a Reuters poll of economists showed, while nearly a third of the respondents predicted a larger 40 bps hike.
A 40 bps point rate hike “could have little bit of a weight on the market, it could cause the Aussie dollar to be a bit high potentially,” Daghlian said.
Among individual shares and sectors, the technology sub-index led losses on the benchmark with its 1.6% slide.
ASX-listed shares of Block Inc fell as much as 3.8%. Weak bullion prices knocked out 1.4% from gold stocks, with country’s largest gold miner Newcrest Mining losing as much as 0.9%.
Australia shares slide on tech rout, subdued financials
Local energy stocks, however, limited losses on the benchmark.
The index jumped 2.1% to hit a more than two-year high on firmer oil prices. Santos climbed as much as 1.6% to hit an over two-year high after the gas producer said on Sunday it is taking steps, along with its joint venture partner Beach Energy, to increase domestic supply of the energy resource.
In New Zealand, the benchmark S&P/NZX 50 index was closed for a public holiday.
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