Australia: Banks drag shares lower, focus on RBA decision
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AUSTRALIAN shares closed lower on Monday (Oct 3), weighed down by banks and tech stocks, as investors braced for another half-point rate hike by the central bank in its fight against red-hot inflation.
The S&P/ASX 200 slipped 0.3 per cent to 6,456.9, with about 655 million shares changing hands, compared with the 30-day average of about 826 million shares. The benchmark closed 1.2 per cent lower on Friday, wrapping up its worst month since June.
It is going to be tricky for the Australian market to make sustained headway, given what is happening with the US Federal Reserve, the US dollar and Europe as we head into winter, said Henry Jennings, a senior analyst at Marcustoday Financial Newsletter.
“Any rally that does happen will just be another bear market rally that we have seen,” said Jennings, adding that the narrative from the RBA’s meeting should be pretty much in line with market expectation.
The Reserve Bank of Australia (RBA) is expected to hike interest rates by 50 basis points on Tuesday and increase borrowing costs further than previously thought to tame red-hot inflation, a Reuters poll showed.
Financials slipped 0.3 per cent, hitting their lowest in three months. The “Big Four” banks fell between 0.1 and 0.3 per cent.
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Technology stocks tracked losses in their Wall Street peers at the end of last week and retreated 1.3 per cent. Software firms Brainchip and Xero fell 2.9 per cent and 2.7 per cent, respectively.
Bucking the trend, energy stocks advanced 1 per cent on strong crude prices. Woodside Energy and Santos added 1.2 per cent and 1.1 per cent, respectively.
Among individual stocks, Infomedia slumped 6.4 per cent after the automotive software firm ended negotiations with Solera and the TA Consortium regarding their A$638.8 million (S$590.2 million) takeover proposals.
In New Zealand, the benchmark S&P/NZX 50 closed 1 per cent lower at 10,959.45, its lowest since early July. REUTERS
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