Australian shares extended losses for a third straight session on Thursday, hit by weak economic growth and a hawkish monetary policy stance by the country’s central bank, while investors awaited a key US inflation data due next week.
The S&P/ASX 200 index fell 0.3% to close at 7,099.70, after slipping 0.2% on Wednesday.
The Reserve Bank of Australia (RBA) is expected to hike its key interest rate once more by the end of September to 4.35%, following a surprise hike on Tuesday and then hold policy for the rest of the year, according to economists in a snap Reuters poll.
RBA Governor on Wednesday warned of more rate hikes ahead to temper rising price pressures, even as risk of a steep economic downturn heightens with data showing the country’s economy grew at its weakest pace in 1-1/2 years last quarter.
“The potential for higher rate and the prospects for weaker growth are not a comfortable mix for equity markets and the comments from Governor Lowe as well as the first-quarter GDP figure for Australia continue to reverberate through the markets today,” said Kerry Craig, global market strategist and J.P. Morgan.
Investors are now looking forward to next week’s pivotal US inflation data and Federal Reserve’s policy meeting, where chances of a rate hike continued to ebb.
Australian shares inch higher ahead of GDP data, miners top gainers
In Sydney, gold stocks slumped 1.9%, their worst session since May 25, even as bullion prices edged higher.
Heavyweights Newcrest Mining and Northern Star Resources settled 0.6% and 2.2% lower, respectively. Tech stocks dipped 3.8%, their worst session since Dec. 20, after the tech-heavy US Nasdaq index closed lower overnight.
Shares of Xero Ltd and Wisetech Global Ltd closed 5.3% and 3.4% lower, respectively. New Zealand’s benchmark S&P/NZX 50 index fell 0.4% to finish the session at 11,715.74.
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