Australia: Shares end lower as miners, banks decline

AUSTRALIAN shares ended lower on Friday (Oct 7) dragged by losses in miners and banks, while investors kept a cautious stance amid fears of looming recession and little signs of the US Federal Reserve slowing its pace of interest rate hikes.

The S&P/ASX 200 closed 0.8 per cent lower at 6,762.8, although the benchmark gained 4.5 per cent for the week, marking its best since early October 2020.

“The ASX this week is bolstered by RBA’s (Reserve Bank of Australia) pivot to opt for a smaller-size hike which I expect will set up the theme for the central bank’s future move,” said Hebe Chen, a market analyst at IG Markets.

Investors are now looking for US monthly non-farm payrolls numbers due later in the day for signs of the Fed’s policy tightening path.

Only a very large miss on the non-farm payrolls figure may change the near-term view of higher rates and weaker growth, said Kerry Craig, global market strategist at JPMorgan.

Financials dropped 0.7 per cent. However, the sub-index advanced 5.2 per cent this week, recording its best in more than six months after the RBA’s softer than expected 25 basis points rate hike to tame inflation.

The “Big Four” banks fell between 0.3 and 0.5 per cent.

Miners slipped 1.2 per cent in their worst session in over a week, but the sub-index posted a 5.1 per cent gain this week. BHP Group, Rio Tinto and Fortescue Metals declined between 1.4 and 1.7 per cent on Friday.

Meanwhile, energy stocks rose 1 per cent leading to a 10.2 per cent jump for the week, its best since November 2020, on the back of strong crude prices.

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Woodside Energy and Santos added 0.2 per cent and 1.9 per cent, respectively.

Separately, RBA flagged risks to financial stability that have increased over recent months as interest rates rose, mounting pressure on Australian household budgets, while housing prices declined.

In New Zealand, the benchmark S&P/NZX 50 closed 0.2 per cent lower at 11,103.79. For the week, it rose 0.3 per cent, snapping three straight weeks of losses. REUTERS