Australian shares end lower on US rate hike worries

By Navya Mittal

Sept 7 (Reuters)Australian shares ended lower on Thursday in tandem with weakness in global equities as new signs of sustained inflationary pressures in the U.S. strengthened the case for higher interest rates for longer.

The S&P/ASX 200 index .AXJO ended 1.2% lower at 7,171.0, posting its sharpest fall since mid-August.

U.S. data showed the services sector unexpectedly picked up steam in August, pointing towards still-sticky inflation, which could mean that rates would stay elevated for longer.

This is “a return to the dark days of mid-August as the ASX200 felt the heat from … a weak lead from Wall Street, following hotter-than-expected ISM services PMI,” said Tony Sycamore, market analyst at IG Australia.

Back home, the outgoing head of Australia’s central bank, Philip Lowe, called for a lift in productivity to help return inflation to target.

Taylor Nugent, an economist at National Australia Bank, said that Lowe’s take on inflation echoed the perspective of European Central Bank President Christine Lagarde and others at the recent Jackson Hole conference.

Australian miners led losses .AXMMon the benchmark, declining 3.4%, their biggest percentage loss since March 16, with BHP BHP.AXdragging down the sub-index as it traded ex-dividend, falling 5.2%.

Meanwhile, shares of lithium miner Liontown Resources LTR.AXadvanced 9% after local media reports of large block trades in the stock, which recently accepted Albemarle’s ALB.N buyout offer.

Energy stocks .AXEJ tracked easing oil prices over China’s uncertain economic outlook, dropping 1.5%. Woodside Energy WDS.AX and Santos STO.AX lost over 1% each.

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 closed 0.007% lower at 11,426.84.

(Reporting By Navya Mittal in Bengaluru; Editing by Sonia Cheema)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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