Australia: Shares extend losses on recession fears after aggressive rate hikes

AUSTRALIAN shares extended losses on Friday (Jun 17), with the tech index leading the rout as it tracked a weak overnight Wall Street finish after the US Federal Reserve’s rate hike, which was initially cheered by investors, fanned fears of a recession.

The S&P/ASX 200 index fell as much as 2.3 per cent and were headed for their biggest weekly drop in over 2 years in early trade. The benchmark fell 1.3 per cent on Thursday.

Wall Street and global shares witnessed a broad based sell-off after a series of rate rises from global central banks rekindled fears that aggressive policy tightening could drag economies into recession.

Markets took a breather after welcoming the Fed’s three-quarters of a percentage point rate hike - its biggest since 1994 - but the sentiment was short-lived after central banks in Switzerland and England also tightened policy rates further, again diverting investors’ attention towards a potential economic slowdown as rates rise.

Tech stocks fell 4 per cent and were set for their worst week in over a year. ASX-listed shares of Block Inc fell 7.2 per cent to lead losses in the sub-index, followed by Novonix which shed 5.4 per cent.

Among individual stocks, GUD Holdings, which was the top loser on the benchmark index, fell as much as 21.8 per cent and was headed for its worst day in over 13 years after the automotive parts maker trimmed its annual forecast.

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Australia: Shares close lower on recession fears after Fed hike

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Miners fell 2.7 per cent, to their lowest level in a month, on weaker iron ore prices. The big 3 miners Rio Tinto, BHP Group, and Fortescue shed between 3.4 per cent and 4.5 per cent

Gold stocks, however, rose 2.4 per cent and were the only gainers among the indices following an uptick in bullion prices. Heavyweights Newcrest Mining and Northern Star Resources climbed 1.9 per cent and 2.7 per cent, respectively.

New Zealand’s benchmark index S&P/NZX 50 fell 2.4 per cent and hit a more than 2-year low. REUTERS