Australia shares hit four-week low

[SYDNEY] Australian shares ended at a four-week low on Thursday (Apr 30), extending losses to an eighth straight session as surging oil prices stoked inflation and growth worries, while top grocer Woolworths sank over 7 per cent after warning rising costs would hit earnings.

The S&P/ASX 200 index fell 0.2 per cent to 8,665.80 points, its lowest closing level since April 2. The benchmark has lost more than 3 per cent in the past eight sessions, though it still ended the month up 2.2 per cent, buoyed by heavyweight miners and banks.

April proved a roller-coaster month for equities: the US-Iran ceasefire hopes lifted the gauge near its pre-war levels, but most of those gains were quickly erased as talks stalled and energy flows through the Strait of Hormuz remained constrained.

On Friday, oil prices shot to their highest in four years after a report that the US was considering potential military action against Iran, intensifying pressure on risk-sensitive equities.

“Without some relief on the energy front, the index (ASX 200) is likely to remain range-bound or test lower supports,” said Tim Waterer, chief market analyst at KCM Trade.

On the bourse, miners fell 2.7 per cent in their worst session since April 2, despite firmer iron ore and copper prices. Woolworths shed 7.8 per cent after trimming the full-year earnings outlook for its domestic food segment, pulling consumer staples down 5 per cent.

Waterer said earnings hits linked to the conflict remain isolated cost shocks for now and do not represent an earnings reset across the board, but warned a prolonged energy shock could trigger “widespread margin pressure” later in the year.

Financials added 1 per cent on the day, with the so called ‘big four’ banks, up between 0.5 per cent and 1.3 per cent. The sector gained 2.9 per cent in April.

Energy stocks extended gains to add 1.4 per cent, but ended the month 2.7 per cent lower.

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Australian shares pare losses after softer core inflation cools rate-hike bets

Focus now turns to Tuesday’s central bank cash rate decision, with all major banks predicting a 25-basis-point hike.

In New Zealand, the benchmark S&P/NZX 50 index rose 1 per cent to 12,903.31 points. REUTERS