Australia: Shares end lower as investors await Fed decision

[BENGALURU] Australian shares ended lower on Wednesday (Dec 15) as cautious investors refrained from placing big bets ahead of outcome of the US Federal Reserve's 2-day policy meeting, possibly adding to the pressure on its peers for further tightening.

The S&P/ASX 200 index closed 0.7 per cent lower, marking its worst session since Dec 2.

Stock markets across Asia skidded in anticipation that the US central bank would stop buying assets after a hotter-than-expected inflation readings for November.

The rapid spread of the Omicron variant is an added complication that could incline the Fed to be less hawkish, though recently officials have sounded more concerned about the persistence of inflation than the pandemic.

"The dual threat of increasing virus cases and inflation dampened expectations of the Australian economy entering 2022 on a firm footing," said Kunal Sawhney, chief executive officer, Kalkine Group.

Weakness prevailed among all major sub-indices on the Australian bourse, with gold and tech stocks losing the most.

Tech stocks closed 2.6 per cent lower, tracking their US peers, after touching the lowest levels since Dec 6 earlier in the session.

Buy-now-pay-later firm Afterpay lost 3.3 per cent.

Gold stocks were the biggest laggards, dropping 2.9 per cent, with Evolution Mining falling the most in the sub-index. The miner's stock dropped 5.2 per cent to post its worst session since Sep 28.

Aussie miners slipped 0.9 per cent on weak iron ore prices.

With an exception of Rio Tinto, which closed 0.2 per cent higher, BHP Group and Fortescue Metals fell 0.5 per cent and 0.3 per cent, respectively.

New Zealand's benchmark S&P/NZX 50 index extended losses into a second session, ending 0.5 per cent lower.

"While the RBNZ has welcomed interest rate hikes for a second time in a row in 2021, increasing inflationary pressures continue to remain a cause of concern for the economy," Sawhney added.

REUTERS