Australian stocks ended lower on Thursday, hit by losses in technology stocks as higher-than-expected US inflation data stoked worries of aggressive rate hikes, although the biggest domestic bank rose after third-quarter cash earnings beat.
The S&P/ASX 200 index closed 1.8% lower at 6,941.00, with broad-based losses across all sub-indexes.
The benchmark was up 0.2% on Wednesday. “Market sentiment was battered by the latest US inflation report for April,” said Kunal Sawhney, chief executive officer of Kalkine Group.
The US consumer index price data showed that inflation has probably peaked in April, though it is likely to stay hot for a while and keep the Federal Reserve’s foot on the brakes to cool demand.
Domestic technology stocks tracked their US counterparts lower, tumbling 8.7% in their biggest drop in more than two years and fifth consecutive session of losses. Australia-listed shares of Block Inc, WiseTech Global and Xero retreated between 6.9% and 17.6%.
Financials slipped 0.8% to hit a near 2-month low, falling for a sixth straight session. Australia and New Zealand Banking and Westpac Banking fell 1% and 1.9%, respectively, but Commonwealth Bank of Australia rose 0.6% after beating quarterly cash earnings estimate.
The metals and mining index slid 2%, with mining majors BHP Group, Rio Tinto and Fortescue Metals dropping between 1.6% and 2.8%.
Weak oil prices dragged energy stocks down 2.3%, with oil and gas explorers Woodside Petroleum and Santos declining 3.1% and 2.1%, respectively.
Australian shares rise on healthcare, mining boost; US inflation data in focus
“Looking ahead, the Australian share market is expected to remain volatile amidst growing recession risks and commodity price fluctuations,” Sawhney said. “To navigate the upcoming volatility, it seems imperative for investors to avoid panic selling and remain patient and judicious.”
New Zealand’s benchmark S&P/NZX 50 index fell 0.5% to 11,177.36, after data showed the country’s near-term inflation expectations rose in the second quarter.