Australian shares slumped on Friday in line with global markets, hit by losses in heavyweight banking and mining stocks, with cautious investors awaiting a speech by Federal Reserve Chair Jerome Powell for cues on the path of US monetary policy.
The S&P/ASX 200 index retreated 0.9% to end at 7,115.2, its worst day since Aug. 16.
It posted a second consecutive weekly drop, down 0.5%.
Market participants are bracing themselves for the risk of a hawkish tilt from Powell in his speech later in the day at the Fed’s annual retreat for global central bankers at Jackson Hole.
“Powell is expected to highlight the progress made in addressing inflation this year while reiterating his recent remarks emphasizing the importance of remaining vigilant,” said Hebe Chen, market analyst at IG Markets.
“Another key point of interest for me is his perspective on the path of the US economy moving forward, especially considering the recent prevailing headwinds from China”.
Back in Sydney, major sub-indexes ended lower.
Interest rate sensitive financial stocks retreated 1.1%, with the ‘Big Four’ banks falling between 0.5% and 1.8%.
Mining stocks slumped 1.6% to post their biggest drop since Aug. 16.
Sector majors BHP Group and Rio Tinto fell 1.7% and 0.9%, respectively.
Energy stocks dropped 1.4% to post their worst day since Aug. 11.
Sector majors Woodside Energy and Santos dropped more than 1% each. Gold stocks slipped 0.5% tracking a fall in bullion prices.
Technology stocks, which closely track their Wall Street peers, fell 2.5%.
Shares of Wesfarmers Ltd gained 3.2%, after its annual profit rose 4.8% as elevated living costs sent new shoppers to its budget department store chain Kmart.
New Zealand’s benchmark S&P/NZX 50 index retreated 0.3% to close at 11,467.66.
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