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% 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%, with BNPL major Afterpay Ltd declining 1.5%.
Miners, banks drag Australia shares lower
The energy sub-index was the biggest laggard on the benchmark, hitting its lowest in nearly two months by slipping 1.8% 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 Ltd and its merger partner Santos Ltd, down 2.8% and 2.6%, respectively.
Banking stocks followed suit, falling up to 0.8% in their third consecutive session of losses, with top lender Commonwealth Bank sagging nearly 1% and Australia and New Zealand Banking losing 0.8%.
Gold stocks were a bright spot, climbing 2.4%, 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% and 4.3%, respectively.
Heavyweight miners were flat at 0.03% up.
In New Zealand, the benchmark S&P/NZX 50 index fell 0.5% to 12,837.4, with dairy firm Synlait Milk Ltd being one of the worst performers.
In other markets, the S&P 500 E-minis futures were up 0.01%.
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