Equities 2 MIN READ

Australian shares post biggest drop in over 2 months as banks slump

March 10, 2023By Reuters

Australian shares posted their biggest drop in more than two months on Friday, weighed by banking stocks, as investors feared prospects of further aggressive interest rate hikes by the US Federal Reserve ahead of the jobs report due later in the day.

The S&P/ASX 200 slipped 1.7% to 7,187.7 by 0020 GMT, set for its worst session since January 3. The benchmark was on track for a 1.3% slump for the week, clocking a fifth straight week of losses.

Investors were cautious before the US non-farm payrolls report for February, with expectations for large wage increases fuelling inflation worries.

Hawkish comments by Fed Chair Jerome Powell this week also heightened concerns about upcoming rate hikes aimed at reining in stubbornly high inflation.

Back in Sydney, financials slid 2.5%, set for their worst session in more than three weeks. The sub-index was on track for a 0.5% decline this week.

The country’s four largest banks fell between 2.5% and 2.9%.

Weak oil prices dragged energy stocks down 2.3% and the sub-index was set to record its worst week since last September. Sector majors Woodside Energy and Santos lost 2.2% and 1.8%, respectively.

Miners dropped 1.7%, in its fifth straight session of losses, with heavyweights BHP Group and Rio Tinto retreating 1.7% and 1.8%, respectively.

Tech stocks slipped 1.6%, tracking a fall in their Wall Street peers overnight.

ASX-listed shares of Block Inc dropped 4.9%.

Gold stocks were the only bright spot on the local bourse, advancing 2.0%, following strong bullion prices.

Sub-index majors Newcrest Mining and Northern Star Resources slid 1.3% and 3.2%, respectively.

New Zealand’s benchmark S&P/NZX 50 dropped 0.9% to 11,722.59, its lowest since February 27.

The country’s manufacturing sector expanded in February but remains below the long-term average, a survey showed.

(Reporting by John Biju in Bengaluru; Editing by Rashmi Aich)

This article originally appeared on reuters.com

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