Australian shares slumped on Thursday to wrap up their worst month since March 2020, as fears grew that aggressive monetary policy tightening to control rising inflation would cause a sharp slowdown in the global economy.

The S&P/ASX 200 ended 2% lower at 6,568.10, shedding 8.9% this month in its third straight monthly drop.

The benchmark also marked its worst quarter since March 2020.

Top central bank chiefs on Wednesday reiterated their commitment to controlling inflation no matter what pain it causes, in order to prevent rapid price growth from becoming entrenched.

“Market sentiment in Australia is one of nervousness… the end of free money has been painful for equity markets,” said Damian Rooney, director of equity sales at Argonaut.

The Reserve Bank of Australia has already raised rates twice this year and promised to do more to control broadening inflationary pressures.

The benchmark stock index lost a tenth of its market value in the first half of 2022 amid policy tightening, the Russia-Ukraine war, and fears of a recession.

However, “expectations of an economy that avoids recession this year means there is scope for equities to perform better in the second half,” said Kerry Craig, a global market strategist at J.P. Morgan.

Miners dropped 3.1% on weak iron ore prices, with sector heavyweights BHP, Rio Tinto and Fortescue Metals down between 3.3% and 4.7%.

For the month, miners declined 13.5%. Financials slid 2.3% in their worst day in nearly two weeks and posted their biggest monthly drop in over two years.

The country’s “big four” banks declined between 2.2% and 2.8%.

Australian shares nudge higher on mining, energy boost

Separately, data showed job vacancies in Australia surged to all-time highs in the May quarter, another sign that rates would likely rise next week.

New Zealand’s benchmark S&P/NZX 50 closed 0.8% lower at 10,868.70, posting its worst quarter since March 2020.