Australian shares skidded more than 1% in an all-sector selloff on Friday, posting their worst week in nine months, as a strong US labour report refuelled fears about higher-for-longer interest rate hikes in major economies.
The S&P/ASX 200 index ended 1.7% down at 7,042.3 points, its lowest level since March 29. The benchmark lost 2.2% for the week and marked its worst week since Sept. 23, 2022.
Data released in the United States showed private payrolls surged far more than expected in June, suggesting that the labour market remained solid despite growing risks of a recession.
Australian shares log worst day in two weeks on rate hike fears
A separate report showed US job openings dropped in May, but remained at elevated levels.
“A continuation of solid US data will mean the FOMC is likely to maintain its hawkish stance on interest rates, the result of which could be additional headwinds for not only US but global equity markets, including Australia,” said Tim Waterer, chief market analyst at KCM Trade.
The Reserve Bank of Australia will likely deliver a 25-basis-point rate hike on Aug. 1, following a pause on Tuesday, according to a Reuters poll on Thursday.
Australian miners slumped 1.9%, posting their lowest level since June 2, with the sub-index dropping 2.7% this week.
Sub-index majors BHP Group and Rio Tinto fell 1.8% and 0.7%, respectively.
Financials retreated 1.5%, their worst weekly loss since May 5. All of the “Big Four” banks lost over 1%.
Gold stocks slumped 3.1% as the bullion lost shine. Energy stocks slid 1.1%.
Gold miners Northern Star Resources and Newcrest Mining slid 3.8% and 2.6%, respectively.
New Zealand’s benchmark S&P/NZX 50 index closed 0.2% higher at 11,980.12 points.
The Reserve Bank of New Zealand will likely keep interest rates unchanged at 5.50% on Wednesday and for the rest of the year, a Reuters poll showed.
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