Australian shares on Thursday closed at their lowest in more than two weeks, as potential future rate hikes to contain inflation raised worries about a global recession.

The S&P/ASX 200 index fell 0.8% to 7,175.5 points, marking a third straight day of losses. Risk sentiment across the globe has been dim of late as persisting worries over the pace of interest rate hikes by the US Federal Reserve and other major central banks, including the Reserve Bank of Australia, has clouded growth outlook.

Azeem Sheriff, a market analyst at CMC Markets said Australia could be more of a victim of the global recession as opposed to them going into recession in the near future, but he was optimistic about the benchmark ending higher this year.

The S&P/ASX 200 index is down 3.5% so far this year, more than 200 points below the closing level last year.

Analysts at Jefferies, however, warned that having avoided a meaningful recession since 1992, Australian economy is “structurally poorly positioned for rising interest rates”.

Australian shares end higher on mining boost; RBA decision in focus

Domestic miners lost over a percent on the back of lower iron-ore prices, with behemoths Rio Tinto, BHP Group and Fortescue all seeing a decline. Energy stocks were the top percentage losers, with the sub-index falling over 2.7%.

Sector majors Woodside and Santos lost 3.8% and 1.3%. Financials shed around 1%, with all the “Big Four” banks falling.

National Australia Bank dropped 1.6%. Shares of Link Administration marked their worst day since Sept. 26 after the firm ended takeover talks with Canada’s Dye & Durham.

New Zealand’s benchmark S&P/NZX 50 index ended 0.1% up at 11,617.14 points.

The country’s flagship carrier Air New Zealand increased its earnings forecast for the first half of fiscal 2023 on strong travel demand across domestic and international networks. Shares were up as much as 4.6%.