Australian shares closed lower in volatile trading on Wednesday as gains in the heavyweight financial segment failed to offset a slump in gold and mining stocks, ahead of the outcome of the US Federal Reserve’s meet.
The S&P/ASX 200 index fell 0.16% to 7304.7. The benchmark slipped 0.4% on Tuesday.
The US central bank kicked off its two-day policy meeting on Tuesday. Traders see a 99.9% chance of a 50 basis-point hike on Wednesday, according to CME’s FedWatch Tool, which would mark the largest rate increase by the Fed since May 2000.
Local miners fell 1.2% to touch a one-week low as lingering demand worries over top metals consumer China’s COVID-19 lockdown dragged iron ore prices lower. Sector giants BHP and Rio Tinto crashed by 0.6% and 0.7% respectively, while Fortescue Metals lost 2.4% to hit a one-week low.
China’s zero-tolerance policy and COVID-19 lockdowns are driving down global growth and could continue to affect domestic miners in the days ahead, Henry Jennings, senior analyst at Marcustoday Financial Newsletter said.
The gold sub-index tumbled 1% to hit its lowest since March 2, with sector leaders Newcrest Mining and Northern star losing 0.9% and 1.3% each. Bucking the trend, financials surged 0.7%.
Heavyweights Commonwealth Bank of Australia and Westpac Banking climbed 0.7% each, while the National Australia Bank rose 1% to mark its best day in over five weeks.
Australian shares fall as central bank raises interest rates, flags more hikes
Australia and New Zealand Banking also advanced as much as 2.1%, after the country’s No. 4 lender beat estimates for first-half profit. Australian retail sales beat expectations for a third straight month in March, helping the country weather this week’s rise in interest rates, data from the Australian Bureau of Statistics showed.
New Zealand’s benchmark S&P/NZX 50 index ended the session flat after the Reserve Bank of New Zealand said the country’s financial system remained robust in the context of significant global economic challenges.
Comments
Comments are closed.