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Australian shares slipped on Monday, in line with weakness in global markets, with financial and gold stocks leading losses after China delivered a smaller-than-expected cut to its lending rates.

The S&P/ASX 200 index closed 0.5% lower at 7,115.5 points.

The benchmark rose 0.03% on Friday. Australia’s top trade partner China cut its one-year benchmark lending rate to support its ailing economy but kept its five-year lending rate unchanged amid broader concerns about a rapidly weakening currency.

Investors were expecting more rate cuts from the world’s second-largest economy, with its post-pandemic economic recovery having faltered due to a worsening property slump, weak consumer spending and tumbling credit growth.

“China’s economic uncertainties may continue to impact Australian miner stocks. But a recent rebound in energy prices could offer a buffer,” said Tina Teng market analyst, APAC & Canada at CMC Markets.

Investors are also looking for further clues on rate hikes from US Federal Reserve Chair Jerome Powell later this week.

“I suspect he will talk about data dependency and probably higher-for-longer (interest rates), which seems to be the mantra,” said Henry Jennings, senior analyst and portfolio manager at Marcustoday Financial Newsletter.

Back in Sydney, heavyweight financial stocks were the biggest drag on the benchmark index, falling 0.9%.

The so-called “big four” banks fell between 0.4% and 3.1%. Shares of Australia’s third-largest lender, Westpac Banking Corp, slumped 3.1% to hit its lowest level since June 26, after the company flagged an acceleration in its quarterly expenses.

Gold stocks fell 0.9%, with Northern Star Resources and Newcrest Mining falling 1.2% and 0.8%, respectively.

Technology stocks fell 1.3%. Mining stocks were largely unchanged, with sub-index majors BHP Group and Rio Tinto falling 0.4% and 0.8%, respectively.

The BHP Group is due to report its fiscal 2023 results on Tuesday.

New Zealand’s benchmark S&P/NZX 50 index retreated 1.3% to 11,458.69 points.

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