Australia: Shares post worst day in 6 weeks in sector-wide sell-off

AUSTRALIAN shares fell on Monday (Aug 22), pulled lower by heavyweight mining and financial stocks, as investors locked in gains following 5 straight weeks of rally in the main index.

The S&P/ASX 200 index closed 1 per cent lower at 7,046.90. The benchmark ended flat on Friday.

“I think it is quite a normal pullback,” said Brad Smoling, managing director at Smoling Stockbroking, as the market has regained much ground after big falls earlier in the year.

“Having a quiet day to kick off the week is pretty normal, pretty healthy. And I think we’re probably gonna have a very strong balance of the year,” he added.

Investors are waiting for Jackson Hole symposium later in the week, amid concerns that US Federal Reserve chair Jerome Powell may not meet hopes for a dovish pivot on policy.

On the domestic bourse, heavyweight banking stocks led the losses with a 1.2 per cent drop. The so-called “big four” banks fell between 1 per cent and 1.7 per cent.

Gold stocks slumped 3.4 per cent after bullion prices fell to their lowest in over 3 weeks on dollar strength and expectations of more rate hikes from the US Fed to tame surging inflation.

Sector major Newcrest Mining slipped 4.4 per cent, while Northern Star Resources fell 2.7 per cent.

Mining stocks followed suit to end 0.9 per cent lower. Heavyweights BHP, Rio Tinto and Fortescue Metals fell between 0.3 per cent and 0.5 per cent.

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Energy stocks fell 0.9 per cent on weaker oil prices, while technology stocks fell 1.5 per cent.

Across the border, Reserve Bank of New Zealand deputy governor Christian Hawkesby said that policymakers want rates to be “comfortably above neutral” to help lower core inflation.

New Zealand’s benchmark S&P/NZX 50 index ended 0.7 per cent higher at 11,763.95. REUTERS