Australia: Tech, energy sectors dent shares amid rate-hike fears

[BENGALURU] Australian shares dropped on Thursday, with commodity and tech stocks weighing the most, as investors feared the US Federal Reserve will raise interest rates sooner than anticipated to tame rising prices in the world's largest economy.

The S&P/ASX 200 index was down 0.3 per cent at 7,369.9 points, as of 1119 GMT.

While strong US retail data this week showed that an acceleration in inflation has not stifled economic growth so far, investors feared that further increases in prices could push the Fed into tightening policy.

This triggered all major indexes on Wall Street to close lower, with Australian tech stocks tracking the losses as they drop as much as 0.8 per cent, with BNPL major Afterpay declining 1.5 per cent.

The energy sub-index was the biggest laggard on the benchmark, hitting its lowest in nearly two months by slipping 1.8 per cent after oil prices slumped to a six-week low on oversupply and low demand amid rising Covid-19 cases in Europe.

The sub-index was dragged by Oil Search and its merger partner Santos, down 2.8 per cent and 2.6 per cent, respectively.

Banking stocks followed suit, falling up to 0.8 per cent in their third consecutive session of losses, with top lender Commonwealth Bank sagging nearly 1% and Australia and New Zealand Banking losing 0.8 per cent.

Gold stocks were a bright spot, climbing 2.4 per cent, as bullion prices strengthened with investors flocking to the safe-haven metal amid inflation worries.

Gold miners Evolution Mining and De Grey Mining led the gains, up 6.7 per cent and 4.3 per cent, respectively.

Heavyweight miners were flat at 0.03 per cent up.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.5 per cent to 12,837.4, with dairy firm Synlait Milk being one of the worst performers.

In other markets, the S&P 500 E-minis futures were up 0.01 per cent.

REUTERS