Banks, miners drag Australian shares lower as caution grows ahead of local jobs data

Australian shares fell on Monday, dragged down by heavyweight miners and banks, as investors turned cautious ahead of a key unemployment report that could shape the Reserve Bank of Australia’s (RBA) next interest rate decision.

The S&P/ASX 200 index lost 0.7% to 8,800.80 as of 0028 GMT.

The benchmark is set for its biggest intra-day percentage loss in nearly two weeks.

Markets see little chance of easing at the RBA’s meeting this month after a run of solid domestic data. Expectations for a quarter-point reduction to 3.35% in November have eased to 76% from full pricing a few weeks ago.

The central bank is widely expected to hold rates steady at its two-day meeting on September 29-30.

Investors are now awaiting the unemployment data on Thursday, which will be pivotal for the RBA in assessing whether the gradual softening in labour market conditions that policymakers have long anticipated is starting to emerge.

Rate sensitive banks lost 0.7%, with the Commonwealth Bank of Australia dropping 1.2%.

National Australia Bank and Westpac shed more than 0.4% each.

ANZ Group fell as much as 1% after agreeing to pay A$240 million ($159.6 million) in record penalties to Australia’s corporate regulator for systemic failures.

The stock was last down 0.2%. Adding to the somber mood, miners dipped 1.1% on lower iron ore prices as rising steel inventory in top consumer China during the peak demand season weighed on sentiment.

Index majors BHP, Rio Tinto and Fortescue lost between 0.2% and 0.8%.

Elsewhere, health stocks retreated 1.6%.

Consumer discretionary, down 0.4%, was set for its third straight session of losses.

New Zealand’s benchmark S&P/NZX 50 index declined 0.4% to 13,175.10 points, as local investors awaited second-quarter GDP data on Thursday to gauge the local central bank’s mood ahead of a rate decision next month.