Australia: Shares drop as Fed official's hawkish view spooks investors

[BENGALURU] Australian shares on Monday were set for their steepest fall in nearly five weeks, as they tracked a sell-off on Wall Street in the previous session on comments from a Federal Reserve official on sooner-than-expected rate hikes.

The S&P/ASX 200 index lost 1.6 per cent to 7,245.8 by 0114 GMT.

Elsewhere, Japan's Nikkei was down nearly 3 per cent at 28110.28 and S&P 500 E-minis futures dipped 0.2 per cent.

Wall Street's main indexes fell sharply on Friday after US central bank official James Bullard said he saw rate increases beginning as early as next year to curb rising inflation, spooking investors already worried about higher rates by 2023.

In the domestic market, financials declined the most, shedding more than 3 per cent. The so-called "Big Four" banks fell between 2.1 per cent and 4.4 per cent.

Commonwealth Bank of Australia, the country's largest lender, fell the most and its shares were down as much as 4.4 per cent.

CBA said it would sell its Australian general insurance business to South Africa's biggest privately-owned insurer Hollard Group for an upfront cash consideration of A$625 million (S$631.9 million), making a post-tax gain of A$90 million.

Gold stocks lost nearly 2 per cent, with sector heavyweight Newcrest Mining dipping 1.3 per cent.

Energy stocks were down 1.8 per cent, with Viva Energy slipping 1.1 per cent.

Miners dropped 1.7 per cent, with mining giants BHP Group and Rio Tinto falling 1.2 per cent and 1.8 per cent, respectively.

Among the few gainers, Boral Ltd was the biggest gainer on the benchmark, up 2.4 per cent, on divesting its North American building products business to Westlake Chemical Corp for US$2.15 billion.

New Zealand's benchmark S&P/NZX 50 index was roughly flat at 12,533.16.

Power company Mercury NZ Ltd said it would buy electricity generator Trustpower Ltd's gas, telecommunications and retail electricity supply business for NZ$441 million (S$413 million).

Mercury's shares were among the top gainers, up as much as 3.1 per cent.

REUTERS