Bank rally helps Australia shares weather global equities selloff

Australian shares dipped slightly on Thursday before rebounding as bank stocks surged following disappointing employment data, which reduced expectations of further interest rate hikes. The S&P/ASX 200 index closed 0.1% lower at 8,719.70 points, after falling 0.6% the previous day. September employment figures showed a drop, with the unemployment rate remaining at a five-year peak of 4.7%, prompting investors to lower their hopes of a November rate hike from 32% to about 17%, and a December increase from 56% to 23%.

Bond yields for three-year Australian bonds dropped to a one-month low of 4.800%, reacting to reduced interest rate expectations. Financial sector stocks, including Commonwealth Bank of Australia, jumped 3.3%, benefiting from a rate pause being favorable for the housing market due to lower loan servicing costs, potentially increasing loan applications and earnings.

However, the broader market faced a global selloff as US consumer inflation exceeded forecasts, raising expectations of more Federal Reserve rate hikes later in the year, which caused a decline in Asian tech stocks. South Korea's KOSPI fell 8%, while Japan's Nikkei dropped nearly 5%. The mining sector also suffered, with its sub-index falling over 4.3% amid falling global copper prices.

Technology stocks declined 3.4%, with data center firms NEXTDC and Macquarie Technology sinking 7.4% and 8.9%, respectively. Real estate firm Goodman Group saw a 3.9% drop, pulling down the real estate index by 0.7%. New Zealand's S&P/NZX 50 index finished the day up 0.5% at 13,832.80 points.