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Australia, New Zealand: Shares slip as Fed rules out lengthy easing after rate cut
[BENGALURU] Australian shares ticked lower on Thursday, with miners leading the drop as Federal Reserve Chairman Jerome Powell appeared to rule out a lengthy policy easing cycle after the U.S. central bank made its first rate cut in a decade.
The S&P/ASX 200 index was down 0.2 per cent or 11.9 points at 6,800.7 by 0159 GMT. The benchmark declined 0.5 per cent on Wednesday.
Chris Weston, head of research at Pepperstone Group in Melbourne said investors did not hear what they wanted to from Powell, leading to negative gyrations in equity markets.
"In an easing cycle, it is the market that sets policy, not the Fed, and if you want to challenge that dynamic, we will see volatility," he added.
Mining stocks dropped to a near three-week low and accounted for the majority of the losses on the benchmark.
Anglo-Australian miner Rio Tinto Ltd saw its worst day in one week, while rival BHP Group slid to a more than six-week low.
Kicking off the earnings season for major miners, Rio is slated to report first-half results after market close, with analysts expecting the company to benefit from surging iron ore prices.
Overnight, Rio-controlled Turquoise Hill Resources said an impairment charge at the cash-generating unit of its Oyu Tolgoi copper mine in Mongolia led to the company missing estimates for second-quarter profit.
Gold miners slumped 4.1 per cent, their sharpest intraday loss in more than two years and were among the top losers on the benchmark as prices of the precious metal took a hit after Fed's policy outlook statement.
Resolute Mining Ltd slumped as much as 10.4 per cent, seeing its sharpest fall in over nine months and was among the worst performers on the main index.
Adding to the weakness, Australian shares of Janus Henderson Group PLC dropped 9.3 per cent to their lowest since Dec 27, 2018, after posting a sharp drop in first-half profit.
In a bright spot, Mineral Resources jumped 3.2 per cent and was among the top gainers on the benchmark after it said US-based Albemarle Corp will take a controlling stake in the company's Wodgina lithium project.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index slipped 0.2 per cent or 23.97 points to 10,833.78.
Shares of dairy firm a2 Milk Company fell 2.4 per cent, accounting for most of the losses on the benchmark.