Australia: Miners, banks drag shares lower

[BENGALURU] Australian stocks ended lower on Tuesday (Nov 16), weighed down by heavyweight miners and major lenders, following soft leads from commodity markets and as the central bank acknowledged rising inflationary pressures even as it talked down the threat of rate hikes next year.

The S&P/ASX 200 index fell 0.67 per cent to close at 7,420.4 points. The benchmark rose 0.36 per cent on Monday (Nov 15).

Australia's central bank does not expect price pressures to force interest rate hikes before 2024. However, it seems to be alerted to risks in its inflation forecasts as it acknowledges an upward shift in the distribution of possible outcomes.

"Inflation worries appear to be overpowering the Australian share market despite a dovish projection on the interest rate from the central bank," said Kunal Sawhney, chief executive officer of Kalkine Group said.

"With Westpac raising its fixed mortgage rates for the third time in a month, the ultra-low interest rates seem to be nearing their end."

Financials fell 0.38 per cent, dragged by declines in the "big four" banks in response to inflation worries, with the country's largest lender Commonwealth Bank giving up as much as 0.9 per cent.

Major miners fell 1.66 per cent, as iron ore prices continued to soften, with global miners BHP Group down 2.6 per cent and Rio Tinto down 2.2 per cent.

Diversified miner Iluka Resources fell by 4.1 per cent, while iron ore producer Mount Gibson Iron skidded 6.4 per cent.

Technology was the only sector to resist, rising 0.18 per cent, led by data centre operator NEXTDC, up 1.8 per cent, followed by sector heavyweight Afterpay, gaining 1.7 per cent.

New Zealand's benchmark S&P/NZX 50 index fell 0.48 per cent to finish the session at 12,902.7 points.

REUTERS