Banks, tech weigh down Australian shares; Gulf war keeps energy stocks up
- The benchmark S&P/ASX 200 index closed down 0.7% at 8,461 points, after falling as much as 1.6% earlier
Australian shares fell on Monday, dragged by banks and technology stocks, as inflation concerns on the back of high energy prices hit investors’ risk appetite.
The benchmark S&P/ASX 200 index closed down 0.7% at 8,461 points, after falling as much as 1.6% earlier.
The index has lost 8% so far in March, set for its worst monthly performance since June 2022.
Global financial markets came under pressure after Yemen’s Iran-backed Houthi rebels attacked Israel over the weekend, while a growing US military presence raised fears of further escalation in the month-old war.
Brent has soared 59% this month, the steepest monthly jump, exceeding gains seen during the 1990 Gulf War.
In Sydney, the financials sub-index shed 2.2% to finish at its lowest level since early February.
All the “Big Four” banks lost between 1.6% and 4.1%, with Westpac losing the most.
Westpac now expects two additional rate hikes, in June and August, in addition to the one already expected in May, citing “longer disruption to and slower recovery in fuel supply,” its chief economist, Luci Ellis, wrote.
“Elevated oil prices are expected to feed through broadly into inflation, and with the Reserve Bank of Australia expected to hike another three times by year-end, these sectors (banks and technology) are likely to remain under pressure absent a near-term de-escalation in the Middle East,” said Justin Lin, investment strategist at GlobalXETFs.
Technology stocks fell 3.2% to its lowest closing point in three years.
WiseTech Global, local shares of Block Inc, and Xero were among top losers on the benchmark.
The energy sub-index rose 2.3%, driven by oil majors and coal miners.
The broader mining index advanced 1.4%, fuelled by a 5% jump in Rio Tinto.
In New Zealand, the benchmark S&P/NZX 50 index fell 1.4% to 12,748.92 points.
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