Australian shares end below key 8,500 level as price pressures keep sentiment muted

AUSTRALIA’S equity benchmark closed below the psychologically key 8,500 support level for the first time since March-end on Wednesday, as worries over inflation stemming from the Iran war kept investors on edge.

The benchmark S&P/ASX 200 index ended 1.3 per cent lower at 8,496.60 points, its lowest close since March-end, and erased Tuesday’s 1.2 per cent gain. The gauge joined a global selloff as investors ramped up bets that the Federal Reserve may need to increase interest rates this year, pushing up bond yields.

Investors’ focus will now be on Thursday’s jobs data for April to draw clues about the Reserve Bank of Australia’s policy trajectory.

“A tight jobs market is a source of inflationary pressure, so any large house beats in the data probably won’t be to the RBA’s liking given the existing inflation challenges facing the Australian economy,” said Tim Waterer, chief market analyst at KCM Trade.

Financials lost 1.1 per cent, with the “Big Four” banks slipping between 0.2 per cent and 2.4 per cent.

The “three rapid-fire rate hikes” this year suggest the sector is bracing for tighter credit conditions, offsetting any optimism around a temporary peak in official interest rates, Waterer added.

Miners fell 2.2 per cent, ending lower for a fifth consecutive session, on weakness in underlying commodity prices.

BHP Group and Rio Tinto declined 2.3 per cent and 1.5 per cent, respectively.

Gold stocks slumped 4.6 per cent to a near eight-week low, with Northern Star Resources and Evolution Mining shedding 2.6 per cent and 4.9 per cent, respectively.

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Energy stocks ended flat after rising as much as 1 per cent earlier in the session, even as oil prices eased. Among individual stocks, James Hardie dropped as much as 5.1 per cent to a seven-week low after its annual earnings forecast missed market expectations.

New Zealand’s benchmark S&P/NZX 50 index ended 1.6 per cent lower at 12,761.03. REUTERS