Economy 2 MIN READ

Australian shares flat as miners offset gains from banks

March 9, 2023By Reuters

Australian shares struggled for direction on Thursday as mining stocks partially countered strength in banking and technology sectors after US Federal Reserve Chair Jerome Powell said they are not preset on the size of rate hikes in March.

The S&P/ASX 200 index was flat at 7,307.70 points by 0002 GMT. The benchmark closed 0.8% lower on Wednesday.

In his second day of testimony to Congress, Powell reaffirmed his message from Tuesday, of higher and potentially faster interest rate hikes. He, however, suggested that the next rate-hike decision hinges on data to be issued before the Fed’s March meeting.

Data released on Wednesday showed a resilient job market with US private payrolls for February increasing more than expected.

In contrast, the local central bank has said on Wednesday that it was closer to pausing its interest rate hike cycle as soon as April.

Australian technology stocks jumped 2.5% to hit their highest level in more than five months.

Cloud-based accounting software company Xero Ltd said it will slash 700 to 800 roles globally as a part of its cost-reduction program. Xero’s shares soared 9.6%, making the stock the top gainer in the benchmark index.

Financial stocks added 0.4% while energy stocks jumped 0.7% even as oil prices extended losses.

Still, mining stocks limited gains in the benchmark index, dropping as much as 1.9% in their fourth straight session of losses.

Global miner Rio Tinto traded ex-dividend and fell over 3% to become the top loser on the benchmark index. Other heavyweight stocks including BHP Group and CSL Ltd also traded ex-dividend and lost as much as 3.1% and 1.1%, respectively.

Shares of Myer Holdings soared after the Australian retailer said its first-half net profit after tax more than doubled, boosted by sales growth as pandemic-induced lockdowns eased.

New Zealand’s benchmark S&P/NZX 50 index edged 0.2% lower to 11,835.23 points.

(Reporting by John Biju in Bengaluru; Editing by Sherry Jacob-Phillips)

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