The Business Times

Australia: Shares post worst week since March 2020 on recession fears

Published Fri, Jun 17, 2022 · 03:26 PM

AUSTRALIAN shares posted their biggest weekly drop since March 2020 on Friday (Jun 17), as investors fretted that aggressive monetary policy tightening would drag the global economy into recession.

The S&P/ASX 200 index sank 1.8 per cent, extending its fall to a sixth session and shedding 6.6 per cent this week.

Central banks worldwide, except Japan, have raised interest rates to battle high inflationary pressures, which have fuelled concerns of an economic downturn.

“All these aggressive rate hikes are raising questions on how long it will take central banks to rein in inflation,” said Steven Daghlian, a market analyst from CommSec.

“However, the composition of our own market is pretty different, so improvements in energy and commodities prices might actually help some sectors.”

In Australia, miners led the losses for the day, declining about 2.8 per cent amid weak iron ore prices in China. Index majors Rio Tinto and BHP Group dropped 4.8 per cent and 4 per cent, respectively.


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Financials slipped nearly 2.2 per cent to their lowest close in more than a year and posted their third straight weekly loss. The “Big Four” banks fell between 1.8 and 3.6 per cent on Friday.

Tech stocks fell nearly 2.4 per cent to wrap up their worst week in more than a year. ASX-listed shares of Block were among the top losers for the day, with a drop of about 6.6 per cent.

Meanwhile, gold stocks gained about 4 per cent on Friday despite weak bullion prices. Heavyweights Newcrest Mining and Northern Star Resources rose 3.5 per cent and 5.2 per cent, respectively.

Among individual stocks, GUD Holdings plummeted more than 19 per cent and was the top loser on the bourse, after the automotive parts maker cut its annual forecast.

New Zealand’s benchmark S&P/NZX 50 index fell 0.5 per cent to 10,589.2, posting a weekly drop of about 5 per cent. REUTERS


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