Australian shares closed lower on Thursday, tracking weakness in global equities, as minutes from the US Federal Reserve’s minutes suggested more rate hikes were likely, while mixed signals from local jobs data also dented investors’ sentiment.
The S&P/ASX 200 index ended 0.2% lower at 7,112.80.
“To a degree, the ASX has been caught up in the bearish sentiment seen across equities since yesterday’s FOMC minutes, and today’s unexpected employment growth contraction has also weighed on the local benchmark,” said Matt Simpson, a senior market analyst at City Index.
Minutes from the Fed’s July meeting indicated there was “little evidence” that inflation pressures were easing, suggesting policymakers were committed to raising rates as high as necessary to tame rising costs.
Meanwhile, figures from the Australian Bureau of Statistics showed the jobless rate dipped to 3.4% in July, the lowest rate since August 1974.
The net employment also surprised by falling 40,900 in July, missing forecasts of a 25,000 increase.
“A decline in the number of employed people, following record highs, along with record number of vacancies, suggests labour market is tight.
Reflecting this, wages are rising and we expect the RBA (Reserve Bank of Australia) to continue to hike,“ analysts at Barclays said in a note.
The brokerage says the RBA could return to 25 basis point increments in September. Heavyweight mining stocks fell 0.5% after iron ore prices hit three-week low.
Gold stocks were the top percentage losers on the benchmark, slumping 3.8%.
Sector major Newcrest Mining fell 2.9%.
Technology stocks tracked Wall Street lower and fell 2.4%. Energy stocks emerged after three consecutive sessions of losses and gained 1.4% on steady oil prices.
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Woodside Energy Group and Santos rose 1.1% and 2.3%, respectively.
Across the border, New Zealand’s benchmark S&P/NZX 50 index ended 0.3% lower at 11,814.34.
A day after it raised cash rate by half point, Reserve Bank of New Zealand Governor Adrian Orr said the central bank was confident domestic inflation was now tracking lower.
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