Australian shares start new financial year lower as banks drag; miners limit losses

Australian shares ended lower on Wednesday, the first trading day of the new financial year, as banks dragged on softer house price data, though gains in miners, led by South32, limited losses.

The S&P/ASX 200 index closed 0.6% lower at 8,722.90. The benchmark had ended down 0.5% on Tuesday.

The Australian bourse began the new quarter on a softer note after gaining 3.5% in April-June, lagging global peers as uncertainty over the central bank’s rate path and Middle East-linked inflation risks clouded the outlook.

“The softer start to FY27 is not a major shock, but it does show investors are entering the new financial year with less appetite and less confidence — to chase risk at elevated levels of uncertainty,” said Hebe Chen, a market analyst at Vantage Markets.

Financials fell 1.7%, posting their biggest single-day drop in nearly two months, with all the “Big Four” banks trading in the red.

Data showed that Australian home prices suffered their steepest fall in three-and-a-half years in June as a record housing boom succumbed to higher borrowing costs.

“Softer house prices are only part of the story,” Chen added, saying the national median house price’s biggest month-on-month drop since 2022 “matters for banks because housing sits at the heart of mortgage demand, household confidence and credit growth.”

On the other hand, miners rose 0.3%, helped by a 9.7% surge in South32 after the diversified miner said it had agreed to sell most of its aluminium assets to U.S.-based aluminium producer, Alcoa, for an implied enterprise value of up to $5.6 billion.

South32 posted its largest single-day gain since 17 March, 2020 and was among the top gainers on the broader index.

Gold stocks dropped 1.3%, hurt by a fall in bullion prices.

Tech stocks declined 1%, while health stocks rose 0.8%.

In New Zealand, the benchmark S&P/NZX 50 index ended flat at 13,610.50.