Australian shares fell sharply on Monday (Oct 10), led by financials and gold stocks, after a surprise drop in US unemployment doused hopes that the Federal Reserve would lean towards a slower pace of monetary policy tightening.
The S&P/ASX 200 index closed 1.4 per cent lower at 6,667.8 in broad-based selling, marking its biggest daily fall since Sep 26. Last week, the benchmark had gained 4.5 per cent in its best show since early October 2020.
Marcustoday Financial Newsletter's senior analyst Henry Jennings predicted a volatile week ahead for the local bourse and said markets were likely to fall further with the banking sector remaining under pressure.
"Yields and oil prices tending higher with China negativity means the pressure will be on. We could see the index below 6,600 (points) again," Jennings said.
Investors across the globe are awaiting the US inflation data due later this week for further clues about the pace of Fed rate hikes.
In Australia, financials dropped 1.5 per cent, giving up some of the previous week's sharp gains. The country's "Big Four" banks retreated between 1.3 and 1.7 per cent.
Gold stocks tumbled 4.7 per cent as bullion prices fell to a one-week low. Newcrest Mining and Northern Star Resources lost 4 per cent and 4.4 per cent, respectively.
Energy stocks gave up 1.2 per cent, as investors booked profits after a report on slowing economic activity in China stoked concerns about global fuel oil demand.
Sector heavyweights Woodside Energy and Santos fell 0.7 per cent and 1 per cent, respectively.
Miners slipped 0.9 per cent even after iron ore prices hit a two-month high on shrinking portside inventory in top steel producer.
Aurelia Metals and Capricorn Metals were the top laggards on the sub-index, shedding 32.6 per cent and 10.1 per cent, respectively.
New Zealand's benchmark S&P/NZX 50 index slipped 1.7 per cent to 10,918.5.
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