Australia: Shares set for worst month in 3 on recession risks

AUSTRALIAN shares were set for a third weekly loss on Friday (Sep 30) and the worst month in three, tracking a broad global selloff, as recession fears sapped stocks after the US Federal Reserve failed to provide any clues on tempering its hawkish stance.

The S&P/ASX 200 index was down 0.5 per cent, as of 12.20 am GMT. The benchmark was on track for its biggest monthly drop since June.

Investors added another cycle of selling after Fed officials gave no indication about the US central bank changing its view on rate hikes, leaving investors skittish about a potential recession in the country.

Back home, the Australian central bank is likely to hike interest rate by another 50 basis points in October in its most aggressive tightening cycle since 1990s to curb red-hot inflation, according to a Reuters Poll.

Tech index was the top loser, slipping 1.4 per cent with ASX-listed shares of Block dropping 3.5 per cent.

Energy stocks lost 0.3 per cent and were on track for their worst month since last November. Sector heavyweights Woodside Energy and Santos dipped 0.06 per cent and 0.1 per cent, respectively.

Financials dropped 0.8 per cent with the “Big Four” banks slumping nearly 1 per cent each.

Bucking the sombre mood, miners advanced 0.7 per cent as iron ore futures were boosted by increased construction activity in top steel producer China.

Iron ore behemoths BHP and Rio Tinto added 1.5 per cent and 2 per cent, respectively.

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Gold stocks were the top gainers, jumping 1.1 per cent on strong bullion prices with the country’s largest gold miner Newcrest Mining rising 0.4 per cent.

New Zealand’s benchmark S&P/NZX 50 index slid 1.6 per cent to 1106.88 points.

The Reserve Bank of New Zealand is expected to deliver its fifth half-point interest rate hike next week and in November, a Reuters poll of economists predicted. REUTERS