Australian shares fall on miners, banks drag; rate hike concerns resurface

Reuters

Australian shares fall on miners, banks drag; rate hike concerns resurface

19 Jul, 2024 a las 7:22 a. m. GMT

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BHP falls to over 1-yr low; RIO at 9-month low

Financials gain 0.8% for the week

Investors dial up RBA rate hike bets

Updates to close

By Aaditya GovindRao

July 19 (Reuters) -Australian shares closed sharply lower on Friday, with mining and financials leading declines for a second straight session, while a strong domestic employment data induced fears of an early interest rate hike.

The S&P/ASX 200 index .AXJO closed down 0.8% to 7,971.60 points. The benchmark closed the week 0.2% higher, but remained below the 8,000 mark hit for the first time on Monday.

Data showing strong jobs growth in June on Thursday led investors to dial up interest rate hike expectations to as early as Aug. 6, when the Reserve Bank of Australia meets next to discuss its policy settings. 0#RBAWATCH

The country's second-quarter inflation print, due at the end of the month, is also being watched for further insight into the RBA's policy plans.

"Its pretty clear globally that disinflation is alive and well. So its only a matter of time till we see some of those trends flow through to Australia," said John Lockton, Head of Investment Strategy at Sandstone Insights.

"The RBA will need to see greater evidence that Australia has its own unique story before it decides to lift the cash rate again," Lockton added.

Miners .AXMM dropped 1.8% tracking weak iron ore prices, and were down 3.1% for the week. IRONORE/

BHP BHP.AX tumbled 2.1% to its lowest level since June 6. 2023, while Rio Tinto RIO.AX slipped 1.7% to a nine-month low.

Financials .AXFJ fell 0.8%, with the 'Big Four' banks losing between 0.8% and 1.2%.

However, the sub-index gained 0.8% in the week, having scaled consecutive record highs in the past few sessions.

"Positive earnings momentum, active capital management, i.e, buybacks and expectations around a good result from Commonwealth Bank of Australia CBA.AX, which will lead the sector, are behind the rally in bank shares", Lockton said.

New Zealand's benchmark S&P/NZX 50 index .NZ50 closed flat at 12,325.60 points.

Reporting by Aaditya Govind Rao in Bengaluru; Editing by Varun H K

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