Miners, banks drag Australian shares to four-month trough

SYDNEY: Australian shares slid to a near four-month low on Friday, dragged by miners and banks, as stronger-than-expected economic data dampened hopes of an imminent rate cut.

The S&P/ASX 200 fell 1.4 percent to 8,634.5, taking weekly losses to 1.5 percent and marking a third straight decline. The benchmark has dropped more than 5 percent over the past three weeks, about 480 points off its Oct. 21 record, as strong domestic data reinforced expectations that the Reserve Bank of Australia’s easing cycle may be nearing its end, with markets even pricing in a risk of hikes next year.

Swaps now imply a 48.6 percent chance the RBA holds rates in May 2026 and a 9.6 percent probability of an increase.

Shane Oliver, AMP’s chief economist, said he does not expect the next rate cut before May unless December quarter trimmed-mean inflation is unusually low and unemployment rises sharply. He added that only one more cut is likely next year.