Australian shares head for fourth weekly loss on oil-driven inflation fears
- The S&P/ASX 200 index slipped 0.5% to 8,661.20
Australian shares extended losses for a second day and fourth week, driven by rising oil prices fueling inflation fears and increasing expectations for another interest rate hike.
- Rising oil prices and renewed inflation worries.
- Prospects of further Australian interest rate hikes.
- Declines across mining and technology sectors.
Australian shares fell for a second straight session on Friday and were on track for a fourth weekly loss in a row, as rising oil prices reignited inflation concerns and added to worries about the outlook for interest rates.
The S&P/ASX 200 index slipped 0.5% to 8,661.20 by 0010 GMT, set to shed 0.8% this week as Middle East tensions and a lack of progress in US-Iran peace talks pushed oil prices above $100 a barrel, dampening risk appetite.
In Australia, persistent inflation pressures, fuelled by soaring energy bills and heavy investment in data centres, have led markets to price in another rate hike, which would lift the cash rate to a near 15-year high of 4.60%.
Meanwhile, data on Thursday showed the local jobless rate unexpectedly rose to a five-year high last month, even as employment made a solid rebound, a mixed report that left markets still wagering on an imminent rate hike to fight inflation.
On the bourse, miners led declines with a 1% drop, pressured by weaker copper prices.
BHP and Rio Tinto both hit their lowest in about a week.
The sub-index was set for a fourth consecutive weekly loss.
Among gold miners, Northern Star Resources and Evolution Mining declined 0.7% and 0.5%, respectively.
Technology stocks tracked overnight losses on Wall Street and were last down 1.5%.
Logistics software maker WiseTech Global slipped nearly 2%, while accounting software firm Xero shed 2.9%.
Consumer discretionary stocks fell 0.7%, while industrials lost 0.5%.
Separately, Insurance Australia Group rose nearly 2% in its biggest intraday gain in two weeks after it agreed to settle an A$2.8 billion ($1.96 billion) Credit Suisse lawsuit over losses linked to collapsed finance firm Greensill Capital.
New Zealand’s S&P/NZX 50 index fell 0.3% to 13,788, but was up 0.5% for the week.