Australian shares settled lower on Monday as investors remained cautious over last week’s central bank warning of more interest rate hikes, while casino operator Star Entertainment tanked to a record low after flagging an up to $1.1 billion earnings hit.
The S&P/ASX 200 index declined 0.2% to 7,417.8, with investors across the globe keenly awaiting US inflation data due later in the week for clues on further interest rate hikes.
The Reserve Bank of Australia (RBA) on Friday revised up its forecasts for core inflation and wages growth and warned of further rate increases, raising the risk the economy could slip into recession.
Futures markets imply around a 73% probability that the RBA will hike rates at its next meeting, with a 27% chance it will pause.
Matthew Haupt, lead portfolio manager at Wilson Asset Management, noted that short-term market rates in Australia had tightened a lot lately.
Star Entertainment closed 22% lower after the group flagged an up to A$1.6 billion ($1.11 billion) impairment charge for first-half earnings from a proposed casino duty hike.
Australian shares post worst day in over one month as miners, financials weigh
Shares in Aurizon sank 6.5% after the rail-haulage firm slashed earnings forecast for fiscal 2023 as prolonged wet weather conditions and a derailment dented freight volumes.
Electronics retailer JB Hi-Fi slid 5.1% after posting underwhelming half-yearly results, while Appen plunged 15.4% as the artificial intelligence company estimated an impairment charge of $204.3 million for fiscal 2022.
Insurance Australia Group rose 4.5% in its best day since July 2022 after it posted a 26.7% jump in first-half cash earnings.
Lendlease Group fell 6.1% after its earnings missed market expectations.
Energy was the only major sector that closed in positive territory with a jump of 1.8%. New Zealand’s benchmark S&P/NZX 50 index fell about 0.9% to 12,075.18, with Fletcher Building shedding 5.4% on fiscal 2023 earnings forecast cut.
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