Australia: Shares extend losses as Federal Reserve stance spooks investors

AUSTRALIAN shares extended their losses on Friday, led by financials, as global markets remained under pressure from a hawkish US central bank, although domestic miners edged higher on the back of upbeat iron ore prices.

The S&P/ASX 200 index was down 0.3 per cent at 6386.00 points, as of 2358 GMT, but was set for a weekly climb of 1 per cent, if gains hold. The benchmark ended 1.8 per cent lower on Thursday.

Wall Street fell for a fourth straight day as economic data failed to alter expectations that the US Federal Reserve would soon back down from its aggressive rate-hike cycle.

In the local market, heavyweight Australian financials shed about 1 per cent, with the “Big Four” banks dropping as much as 1.2 per cent.

The Reserve Bank of Australia on Friday downgraded the outlook for economic growth, warning that more rate hikes will be necessary to bring down sky-high inflation even as it strives to avoid an outright recession.

Meanwhile, miners rose 0.5 per cent as iron ore prices jumped on hopes that China would ease its strict Covid-19 restrictions and offer policy support to the economy.

SEE ALSO

Australia: Banks, miners drag shares lower as Fed sticks to hawkish tone

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

Shares of BHP Group, Fortescue Metals Group and Rio Tinto added between 0.3 per cent and 0.7 per cent. Energy stocks rose 1.1 per cent, with index majors Woodside Energy and Santos jumping about 1 per cent each. Whitehaven Coal climbed 2.6 per cent to become the top gainer in the main index. Shares of Star Entertainment traded flat after the company said three of its units received showcause notices from a Queensland regulator for matters related to a review of their casinos in the state. New Zealand’s benchmark S&P/NZX 50 index was down 0.43 per cent at 11,135.64 points, as of 2357 GMT.

The top loser in the index was Skycity Entertainment with a nearly 2 per cent slump. REUTERS