Australia shares hit one-month low as banks, commodity stocks slide
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On Tuesday, the Reserve Bank of Australia stunned markets with a 25 basis-point increase.
PHOTO: REUTERS
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BENGALURU – Financial and commodity stocks dragged Australian shares to their lowest in more than a month on Wednesday, a day after the central bank surprised markets with a rate increase, while global investors worried about a potential US debt default.
The S&P/ASX 200 index was down almost 1 per cent by 0035 GMT.
On Tuesday, the Reserve Bank of Australia (RBA) stunned markets with a 25 basis-point rise on account of continued elevated price pressures and the need for higher rates to bring them under control.
Global sentiment also took a hit on concerns of a debt default in the United States, with the focus shifting towards the US Federal Reserve’s meeting later in the day, where another 25 basis-point rate rise is likely to be on the cards.
Australia’s financial sector, which occupies one-third of the benchmark index, led losses, dropping about 1.7 per cent to see its worst day since March 20. The country’s largest banks had losses in the range of 1.6 per cent to 1.7 per cent.
The energy index followed suit, dropping about 2.3 per cent, after Brent crude prices slumped overnight. Santos and Woodside Energy dropped 2 per cent and 2.7 per cent, respectively.
Other indexes such as technology and healthcare traded around 1 per cent and 0.3 per cent lower, respectively.
The gold index advanced nearly 4.1 per cent on account of higher bullion prices. Newcrest Mining and Northern Star Resources gained 2.7 per cent and 5.1 per cent, respectively.
New Zealand’s benchmark S&P/NZX 50 index fell 1 per cent to 11,917.3 points. REUTERS
