Australian shares snapped a four-day rally on Thursday, tracking a global sell-off on concerns over accelerating inflation, with banking and technology stocks leading losses.
The S&P/ASX 200 index ended 1.7% lower at 7,064.50.
The benchmark gained 1% on Wednesday. Heavyweight financial stocks fell 1.8%, posting their biggest drop in nearly two weeks, with the so-called “Big Four” banks declining between 1% and 4.1%.
Tech stocks fell 2.7%, following a sharp overnight drop on the Wall Street, after retailer Target Corp lost around a quarter of its stock value, highlighting worries about the US economy and surging prices.
Australia-listed shares of Block Inc, Wisetech Global and NEXTDC Ltd declined 2.4%, 1.6% and 0.9%, respectively.
Australia’s unemployment rate for April hit its lowest since 1974, indicative of a tight labour market and strongly suggesting the Reserve Bank of Australia (RBA) will likely lift interest rates again in June to contain soaring inflation.
“Today’s data remain consistent with a still-tightening labour market this should see stronger wages growth emerge as the year progresses,” Taylor Nugent, economist at NAB, said in a note.
Woodside Petroleum’s shareholders approved a merger with BHP Group’s petroleum arm to create a $40 billion oil and gas producer, according to proxy votes shown at the company’s annual meeting.
Australian shares end at near 2-month low, strong forecast lifts Westpac
Shares of Woodside and BHP Group were, however, down due to broader commodity price weakness. Mining and energy stocks both slid 1.6%.
Although markets witnessed a heavy sell-off, it could have closed down “a lot worse”, said Brad Smoling, managing director of Smoling Stockbroking. “Now, money will slowly start to come back and we should get a rally by the end of this week or early next week,” he added.
Gold and healthcare stocks closed up 0.6% and 0.1%, respectively. New Zealand’s benchmark S&P/NZX 50 index closed 0.5% lower at 11,206.93.
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