Australia: Shares set to record worst week in over 1-1/2 yrs after RBA rate hike

AUSTRALIAN shares were on track to mark their worst week in 19 months on Friday (Jun 10), with banking stocks leading the declines as the country's central bank hiked interest rates by the most in more than 2 decades in a move to tame surging inflation.

The S&P/ASX 200 index was down 0.9 per cent at 6,959.90 by 12.40 am GMT, set for its worst week since Oct 30, 2020, if losses hold. The benchmark is on track to retreat 3.9 per cent this week.

In other key markets, Japan's Nikkei fell 1.3 per cent at 27,886.30 and S&P 500 E-minis futures edged 0.1 per cent higher.

Back home, financials rose 0.6 per cent, although the sub-index slipped 7 per cent for the week, its worst since Mar 20, 2020. Three of the "Big Four" banks were up between 1.3 per cent and 1.6 per cent on Friday.

The Reserve Bank of Australia's 50-basis-point hike on Tuesday dragged the banks down this week, raising concerns about the housing market.

The real estate index dropped 1.4 per cent to hit over a year low.

Miners sank 3 per cent, on track for their worst day since a month as iron ore prices slipped on worries about weak profits at Chinese steel mills and fresh Covid-19 alerts in Shanghai and Beijing.

BHP Group, Rio Tinto and Fortescue Metals Group fell between 2.8 per cent and 4.9 per cent.

Weak oil prices weighed on energy stocks that were down 2.1 per cent, but the sub-index recorded a third straight week of gains. Woodside Energy Group and Santos lost 2 per cent and 1.5 per cent, respectively.

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Separately, AGL Energy, fell up to 2.6 per cent as it expected a unit down since April at one of its power stations to restart in late September, more than a month later than earlier flagged, worsening the country's power crisis.

Domestic technology stocks tracked Wall Street's sharp selloff ahead of US consumer price data, sliding 2.5 per cent to mark its worst week in nearly a month.

New Zealand's benchmark S&P/NZX 50 index declined 1.2 per cent to 11,080.56. REUTERS