Australia: Shares end lower as central bank flags rate hikes

AUSTRALIAN shares closed on Friday (Sep 16) at their lowest level in more than a week, with miners leading the losses amid tepid iron ore prices, while risk appetite took a hit after the central bank flagged more interest rate hikes to tame inflation.

The S&P/ASX 200 index closed 1.4 per cent lower at 6,747 points. The benchmark lost 2.1 per cent this week.

Reserve Bank of Australia (RBA) Governor Philip Lowe said interest rates are closer to normalisation after a successive run of outsized hikes, although he warned rates are still low to bring inflation back to the bank’s 2 to 3 per cent target range.

“The hope for peaked inflation ignited by the surprising rise in the unemployment rate has been doused entirely by RBA Chair Lowe’s speech today,” said Hebe Chen, market anaylst at IG markets.

“We can expect rates to stay higher for longer,” said Jessica Amir, market strategist at Saxo Capital Markets, adding that the market has priced in a 0.25 per cent hike by the RBA next month.

Miners slipped 2.4 per cent to touch a 1-week low, tracking a drop in iron ore prices. The sub-index lost 2.4 per cent for the week.

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Rio Tinto, BHP Group and Fortescue Metals slumped between 1.7 and 2.3 per cent.

Financials retreated 0.8 per cent in their fifth straight weekly fall. Commonwealth Bank of Australia and Australia and New Zealand Banking Group shed 0.9 per cent and 0.8 per cent, respectively.

An overnight dip in crude prices dragged Australian energy stocks down 3 per cent in their third consecutive weekly loss. Woodside Energy and Santos fell 2.9 per cent and 2.4 per cent, respectively.

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Australia: Shares fall on Federal Reserve rate hike jitters

Meanwhile, a raft of US economic data further dented sentiment as it failed to alter the expected course of aggressive tightening by the Federal Reserve.

Data showed that US retail sales unexpectedly rebounded in August, while the number of people filing for new claims for unemployment benefits fell to its lowest in more than 3 months.

In New Zealand, the benchmark S&P/NZX 50 closed 0.7 per cent lower at 11,580.46 points, marking its worst week since Jun 17. REUTERS