Australian shares fall as commodity stocks, financials drag; focus on Fed decision

Australian shares slid on Wednesday, dragged down by heavyweight commodity and financial stocks, with cautious investors awaiting the US Federal Reserve’s policy decision for further direction on its interest rates trajectory.

The S&P/ASX 200 index retreated 0.4% to 7,168.5 by 0040 GMT, on track for a third consecutive session of declines.

The benchmark closed 0.5% lower on Tuesday.

The Fed’s rate decision due later in the day will be closely monitored by market participants to gauge whether policy holders still feel the need to raise rates further before the end of this year.

Financial markets have priced in an all-but-certain 99% probability that the US central bank will leave its key Fed funds target rate at 5.25%-5.00% later in the day, and a growing 70.9% likelihood of standing pat at its next meeting in November, according to CME’s FedWatch tool.

Back home, the Reserve Bank of Australia in its September meeting minutes on Tuesday noted that further tightening of monetary policy might still be required should inflation prove more persistent than expected.

Heavyweight mining sub-index, down 1.0%, was on track for their third session of declines and its worst day since Sept. 13, due to weaker iron-ore prices.

Sector-majors BHP Group and Rio Tinto fell 1.3% and 0.7%, respectively.

Australian shares fall as financial, energy stocks drag; RBA minutes in focus

Energy stocks fell 0.9%, with sub-index majors Woodside Energy and Santos slipping 1.3% and 0.7%, respectively.

Financial stocks slipped 0.4%, with the ‘Big Four’ banks falling between 0.3% and 0.5%. Gold stocks fell 0.7%, with gold miner Northern Star Resources falling 1.1%.

But its peer Newcrest Mining rose 0.3%.

Technology stocks, which closely track their Wall Street peers, slid 1.1% to hit their lowest level since July 10 and extended losses for a third straight session.

New Zealand’s benchmark S&P/NZX 50 index edged 0.1% lower to 11,335.48 points.