Australian shares extended losses on Friday, falling more than 1%, as Wall Street slid overnight after US Federal Reserve Chair Jerome Powell said additional interest rate hikes could be warranted.
The S&P/ASX 200 index fell 1.4% to 6,887.6 by 2350 GMT, with most major sectors trading in negative territory.
The benchmark index was on track for its worst week since Sept. 22.
All three major US stock indexes closed lower as Powell’s remarks appeared to push back against market expectations that the central bank’s rate-hiking cycle had run its course.
On Thursday, data showed Australia’s employment rose less than expected in September, following a blowout result the month before, but the jobless rate still ticked down in a sign the labour market remained drum tight.
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Investors are now awaiting the crucial inflation report for the third quarter on Oct. 25 to gauge the Reserve Bank of Australia’s outlook for rate hikes.
“For now, our expectation remains that the RBA is on an extended pause, although the risk that rates will increase this year or early next has risen,” analysts at ANZ said in a note.
Heavyweight miners led the losses with a 1.9% drop, with top miners Rio Tinto and Fortescue down 1.5% and 1.4%, respectively.
Shares of Lynas Rare Earths were down 1.7% after the company said there would be a planned shutdown of all its operations in Malaysia except its mixed rare earth carbonate processing plant in the December quarter.
Financials declined 1.2%, with the “big four” banks down between 0.9% and 1.4%.
Tech stocks dropped 1.1%.
Xero and Computershare fell 1% and 0.9%, respectively. Bucking the trend, energy stocks gained 0.2%, while gold stocks added 0.1%.
In New Zealand, the benchmark S&P/NZX 50 index fell about 1% to 11,026.39.
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