Australian stocks post sharpest fall since mid-December as financials, miners slip

[SYDNEY] Australian shares logged their worst session in over a month on Tuesday (Jan 20) as rate hike jitters knocked heavyweight financials, while miners fell after BHP flagged that drawn-out negotiations with China’s dominant iron ore buyer were pressuring prices.

The S&P/ASX 200 closed 0.7 per cent lower at 8,815.90 points, marking its steepest one-day decline since December 15, 2025.

Financials led the decline, sliding 1.1 per cent. The big four banks fell between 0.9 per cent and 1.8 per cent.

The sector is losing steam as investors rotate out, said Philip Pepe, senior equities analyst at Shaw and Partners.

He added that weaker reinsurance pricing is pulling domestic premiums lower and rising rate hike expectations have unwound the gains banks made when markets were pricing in cuts.

Attention will now be on domestic labour force data, due on Thursday, and next week’s December-quarter inflation print, seen as pivotal for the Reserve Bank’s rate trajectory.

The RBA is scheduled to meet on February 3, with the market now expecting a 30 per cent chance expecting a rate hike, according to LSEG data.

The mining index dropped 1.1 per cent, with BHP Group sliding 2 per cent to a one-week low.

Rio Tinto and Fortescue declined 2 per cent and 0.6 per cent, ahead of their quarterly production reports on Wednesday and Thursday, respectively. Gains in gold miners, however, offered some relief, with investors piling into the safe-haven metal after President Donald Trump threatened tariffs on several European countries over the weekend.

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Gold miners gained 0.4 per cent to notch a lifetime high. Ausgold and Aurum Resources topped the charts, rising 6.3 per cent and 5.6 per cent.

Technology stocks rose 0.9 per cent and the utility index added 1.6 per cent, posting its sharpest intra-day rise in a month. The New Zealand benchmark S&P/NZX 50 index ended 0.05 per cent lower at three-week low of 13,573.93 points. Market now eyes local quarterly inflation print, due on Thursday. Markets imply almost no chance of a rise in the 2.25 per cent cash rate on February 18. REUTERS