Australia: Shares decline over 1% ahead of central bank meeting

AUSTRALIAN shares fell more than 1 per cent on Monday (May 2) in broad-based selling, as investors braced for a central bank policy meeting where it is widely expected to hike interest rates for the first time in more than a decade.

The S&P/ASX 200 index was down 1.3 per cent at 7,338.40 by 0056 GMT after rising 1.1 per cent on Friday, with technology and gold stocks leading the decline.

The Reserve Bank of Australia is expected to raise interest rates on Tuesday, joining a long list of central banks now expected to tighten policies at a much faster pace than previously thought to tame surging inflation, a Reuters poll found.

Australian consumer prices surged at the fastest annual pace in two decades last quarter, likely prompting the central bank to move towards normalisation but as a consequence sparking fears of an economic slowdown.

Among losers on the benchmark, technology stocks dropped 3.5 per cent after their U.S. peers fell sharply at the end of last week as the biggest surge in monthly inflation since 2005 spooked investors already worried about rate hikes.

ASX-listed shares of Block Inc lost 3.5 per cent, while Xero dived more than 4 per cent.

Financials sank 1 per cent, with the “Big Four” lenders losing between 0.5 per cent and 1 per cent

National Australia Bank lost up to 1.1 per cent as the lender entered a deal with the country’s financial crime regulator to address concerns around suspected serious breaches of anti-money laundering and counter-terrorism laws.

Miners dropped 1.4 per cent, with BHP Group, Rio Tinto and Fortescue Metals Group down between 0.5 per cent and 1.4 per cent.

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Meanwhile, Qantas Airways jumped up to 4.4 per cent as the carrier signed a landmark deal with Airbus SE to buy 12 A350-1000 planes capable of the world’s longest commercial flights from Sydney to London.

Gold stocks fell almost 2 per cent as bullion prices dipped on pressure from elevated US Treasury yields.

New Zealand’s benchmark S&P/NZX 50 index was down 0.5  per cent to 11,822.76. REUTERS