Australian shares inch lower as banks and miners drag

Australian shares declined marginally on Wednesday as losses in the banking and mining sectors outweighed gains in gold and energy stocks, amid a decline in consumer sentiment and tighter macroeconomic conditions. The S&P/ASX 200 index slipped 0.3% to 8,710.00 by 0028 GMT, after finishing 0.6% higher on Tuesday. The Westpac-Melbourne Institute survey revealed that consumer confidence dropped for a second consecutive month in October due to higher borrowing costs resulting from Reserve Bank of Australia (RBA) interest rate hikes, which strained household finances and exacerbated cost-of-living pressures.

Tapas Strickland, chief market strategist at Moomoo Australia and New Zealand, noted that with oil trading above US$100 and long-end yields nearing multi-decade highs, the overall macro environment remained tight. For Australian investors, he emphasized that the crucial test would be whether global momentum could broaden before the strain on households impacted corporate earnings. The probability of the RBA keeping rates unchanged in November stood at 75.7%, compared to a 24.3% chance of another rate increase.

Following the decline, banks experienced a 0.3% drop, with the "Big Four" all trading in the red. Miners also saw a slight decline, with BHP Group and Rio Tinto both falling 0.5%. Conversely, gold stocks surged 1.9%, positioning themselves for their best day in a week due to the uptick in bullion prices. Evolution Mining and Northern Star Resources led the gains among gold miners, with increases of 1.6% and 2.4%, respectively.

Energy stocks climbed 0.2%, with major players Woodside Energy and Santos each rising 0.5%. Tech stocks climbed 0.3%, propelled by Wall Street's record-high close the previous day, while healthcare stocks saw a 0.5% rise and real estate firms remained unchanged. New Zealand's benchmark S&P/NZX 50 index remained steady at 13,708.07.