Australian shares ended lower on Wednesday, weighed by technology stocks which tracked Wall Street overnight, as investors brace for the possibility of aggressive interest rate hikes.
The S&P/ASX 200 fell as much as 1.2% during the session, but pared some losses to close 0.5% lower at 7490.1 points, in tandem with global markets.
ASX-listed shares of Block slid up to 7.4%, making the fintech company the biggest percentage loser on the benchmark index, while battery materials maker Novonix fell as much as 8% in its worst day since Feb. 24.
Local tech stocks led losses, down 3.5%, following Wall Street's overnight tumble after the Federal Reserve Governor signalled the bank would take a hawkish stance to combat inflation.
Australian shares eke out gains on tech strength; RBA stance caps advance
The Reserve Bank of Australia also opened the door to the first interest rate increase in more than a decade on Tuesday.
"If an uber dovish central bank like the RBA is shifting its stance, we should all take note.
Especially as Australia is about as insulated from the stagflation wave sweeping the world as any," said Jeffrey Halley, senior market analyst, Asia Pacific, at OANDA.
The possibility of a rate hike as early as June helped Commonwealth Bank, National Australia Bank, Westpac Banking and Australia New Zealand Banking gain between 0.8% and 1.2%.
Uncertainty in the local market is likely to persist for the rest of the week due to the situation in Ukraine, volatility in bond markets and lockdowns in China, said Steven Daghlian, an analyst at CommSec.
The United States and its allies on Wednesday prepared new sanctions on Moscow over civilian killings which President Volodymyr Zelenskiy described as "war crimes".
The gold sub-index fell 3.4% after Australia's biggest gold miner Newcrest slipped 2.8%.
In New Zealand, the benchmark S&P/NZX 50 closed 0.4% lower at 12,079.3 points as the country introduced a 35% tariff on all imports from Russia.
Comments
Comments are closed for this article.