Australian stocks slip on weakness in miners, staples; rate hike concerns weigh

Australian shares slipped on Thursday, dragged down by sharp losses in mining and staple stocks, amid growing bets that the central bank could raise interest rates as soon as next month following Wednesday’s hot inflation reading.

The S&P/ASX 200 index fell 0.6% to 9,074.90 by 0059 GMT.

The benchmark had fallen 0.4% in the previous session.

Bets of a rate hike at the Reserve Bank of Australia’s upcoming September meeting rose to 47%, up from 16% before the data.

Three of the “Big Four” banks now expect a rate hike this year, with National Australia Bank forecasting a 25 basis point increase in September, while Westpac expects rates to remain on hold for the rest of the year.

Rate-sensitive financials fell 0.4%, while real estate stocks lost 1.4%.

The big four banks were mixed.

Among the laggards, gold stocks shed 1.8%, marking their worst session in over a week, as bullion prices extended their losses. Evolution Mining declined 3.2%.

The broader mining sub-index declined 1.1%, with heavyweight BHP Group and Rio Tinto down 1.1% and 0.4%, respectively.

Staples dropped as much as 1.7%, weighed down by Wesfarmers, which flagged spending pressures amid squeezed household budgets, overshadowing its better-than-expected annual profit.

The stock fell as much as 2.5% to an over two-month low.

The sub-index erased most of the previous session’s gains, which were driven by gains in top grocer Woolworths, now down 1.9%.

Bucking the trend, healthcare stocks gained 0.3, led by a 15.6% surge in Ramsay Health Care after its full-year underlying net profit after tax topped market expectations.

The stock hit a two-year high.

Among individual stocks, Qantas Airways rose as much as 3% to a week’s low after issuing upbeat revenue guidance. Meanwhile, New Zealand’s benchmark S&P/NZX 50 index fell 0.4% to 13,963.47.