Australian shares ended lower on Monday, dragged by energy and tech stocks, as sentiment remained weak at the start of a week marked by a slew of central bank meetings, with expectations of a jumbo size rate increase by the US Federal Reserve.
The S&P/ASX 200 index closed down 0.3% at 6,719.90 at the close of trade.
Investors have priced in at least another 75 basis point increase in rates at the end of a two-day Federal Open Market Committee’s meeting on Wednesday.
“While markets await the Fed decision that will further batter the growth stocks here, an additional factor pressuring the Aussie markets is the country’s high inflation numbers, which could force the Reserve Bank of Australia to continue hiking rates,” said Jessica Amir, analyst at Saxo Capital Markets.
Australia’s top central banker said earlier this month that further rate increases would be needed to contain inflation but its board was not on a pre-set path and was aware rates had already risen sharply.
Tech stocks declined as much as 1.3%, tracking Friday’s drop at tech-heavy peer Nasdaq index.
Brainchip Holdings fell 4.9% to lead losses on the sub-index, followed by Australia-listed shares of Block Inc, down 4.5% The energy index also fell 1.1% even as oil prices rose.
Paladin Energy and Whitehaven Coal were the biggest drags on the index, shedding 4.1% and 3.7%, respectively.
This week is also smattered with market holidays that could thin liquidity and result in sharper price moves.
Japan and Britain are closed on Monday, Australia on Thursday, and Japan again on Friday, among others. However, the gold and metals indexes advanced 1.2% and 0.1%, respectively.
Australian shares end lower as central bank flags rate hikes
Lake Resources was the top gainer on the benchmark index after the lithium miner said work was proceeding at its Kachi project in Argentina, following a dispute with partner Lilac Solutions.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index finished the session down 0.4% at 11,531.99 points.
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