Australian shares log biggest fall in over three months
The S&P/ASX 200 index logged its steepest drop since June 4
Australian shares experienced their most significant decline in over three months on Tuesday (Sep 8), as financials and mining stocks struggled amid higher oil prices and rising inflation concerns. The S&P/ASX 200 index fell 1% to 8,920.80 points, marking the lowest closing level since July 28. Oil prices surged following Iran's threat to retaliate against any US attacks by targeting energy infrastructure in the Gulf, raising fears of potential supply disruptions. This led to gains in energy stocks, with Santos and Viva Energy rising 0.7% and 2.1%, respectively.
The Reserve Bank of Australia (RBA) assistant governor, Sarah Hunter, stated that the central bank aims to cool the economy through higher rates, but downplayed the risk of a potential recession. The market sentiment turned risk-averse, particularly in rate-sensitive sectors, as investors priced in the likelihood of another central bank hike.
Financials suffered the steepest drop since August 20, with all the "Big Four" banks declining between 1.3% and 2.6%. Consumer sentiment also declined sharply, according to a Westpac-Melbourne Institute survey, highlighting growing pressure on households due to concerns about rate hikes and higher fuel prices.
Technology stocks saw a decline of 1.8%, with WiseTech Global and Xero losing 2.8% and 2.6%, respectively. In New Zealand, the benchmark S&P/NZX 50 index fell 1.1% to 13,792.90 points, marking its largest drop since July 30.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
