The Business Times

Australia: Shares slip on Powell comments; Fortescue drags on subdued earnings

Published Mon, Aug 29, 2022 · 10:06 AM

AUSTRALIAN shares fell on Monday, tracking Wall Street losses last week after US Federal Reserve Chair Jerome Powell reiterated a hawkish tone to battling inflation, while miner Fortescue Metals skidded after posting a lower annual profit.

The S&P/ASX 200 index fell 1.92 per cent to 6,967.9 by 0117 GMT, with all sectors trading in the negative territory. The benchmark ended 0.8 per cent higher on Friday.

Powell said in his speech at the Jackson Hole central banking conference the Fed will raise rates as high as necessary to limit growth and tackle inflation, in what is said to be his bluntest language yet about what is in store for the world’s biggest economy.

Global risk appetite has been bruised after his blunt remarks triggered a market rout amid a mounting risk of more aggressive rate hikes.

Rate-sensitive technology stocks in Australia led the retreat on the benchmark, falling about 4 per cent, with ASX-listed shares of Block Inc down 7.6 per cent at A$97.8.

Fortescue Metals Group’s shares fell 2.6 per cent after the world’s fourth-largest iron ore miner took a hit to its full-year profit, which fell 40 per cent to US$6.20 billion, and slashed its final dividend from A$2.11 apiece declared last year to A$1.21 per share.

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Energy stocks, too, showed weakness on mixed oil prices, falling 2.4 per cent.

Sector heavyweights Santos and Woodside Energy Group skidded 2.5 per cent and 2.8 per cent, respectively.

Financials skidded 2 per cent, with all of the so-called “Big Four” banks trading in the negative territory.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 0.57 per cent to 11,542.5 per cent.

Bucking the trend, shares of New Zealand’s a2 Milk Co climbed 9.5 per cent after posting a better-than-expected annual profit and forecasting a positive 2023. REUTERS

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