Australian shares ended lower on Thursday led by a drag in tech stocks and financials, a day after surprisingly strong third-quarter inflation raised odds of an interest rate hike in November.
The S&P/ASX 200 index fell 0.6% to 6,812.3, its lowest level since in a year, with most major sub-indexes in negative territory.
Reserve Bank of Australia (RBA) Governor Michele Bullock on Thursday said the strong third-quarter inflation report was around policymakers’ expectations, and they were still considering whether it would warrant a rate rise.
Data on Wednesday showed the consumer price index (CPI) rose 1.2% in the third quarter, above market forecasts of 1.1% and up from a 0.8% increase in the previous quarter.
Market analyst at IG Australia, Tony Sycamore said that, two weeks ago, the market was pricing in just a 5% chance of an RBA rate rise in November, where a 25 bps rate rise now appears a formality with the inflation update and a week of hawkish RBA communique.
Australian shares rise ahead of CPI data as miners gain
Globally, Asian stocks slid to 11-month lows on Wednesday, US futures dropped and the dollar surged as Treasury yields spiked back toward peaks on fears that US interest rates will stay high.
In Sydney, tech stocks declined 2.6%, tracking overnight losses in tech-heavy Nasdaq. Shares of tech major Megaport were down 16.3%.
Financials slipped 0.5%, with the country’s so-called “big four” banks losing between 0.2% and 1.1%. Gold stocks declined 0.8% with Newcrest Mining, the country’s largest gold miner, losing 1.3%.
Bucking the trend, heavyweight miners inched 0.2% higher, after iron ore rallied on Wednesday on China’s stimulus boost.
Sector majors BHP Group and Rio Tinto gained 0.5% and 1.2%, respectively.
In New Zealand, the benchmark S&P/NZX 50 index fell 0.3% to 10,848.54 points.
Comments
Comments are closed for this article.