Australian shares slump as US data sparks recession fears
Aug 5 (Reuters) -Australian shares slumped on Monday and were poised to extend losses for a second consecutive session, as weak U.S. jobs data fuelled fears of a recession, while investors maintained a cautious stance ahead of an interest rate decision this week.
The S&P/ASX 200 index .AXJO was down 2.6% at 7,737.3 points, as of 0039 GMT, and on track for its worst intraday performance since September 2022, if losses hold. The benchmark ended 2.1% lower on Friday.
The Aussie dollar was trading 0.2% stronger against the greenback at A$0.65.
The weak U.S. payrolls data on Friday suggested that the economy was slowing more rapidly than anticipated.
Markets are now pricing in an over 70% chance of a 50-basis point cut at the U.S Federal Reserve's September meeting, compared with 22% last week, according to CME FedWatch.
The Reserve Bank of Australia is expected to keep interest rates unchanged when it meets on Tuesday, and wait until the first quarter of 2025 before cutting them, according to a Reuters poll.
Rate-sensitive financials .AXFJ dropped 3.2% and were on track to record their worst day since early May 2023, if current trend holds. Shares of the Big Four banks dropped between 2.8% and 3.8%.
The U.S. Dow Jones Industrial Average .DJI fell 610.71 points, or 1.51%, at 39,737.26 points on Friday. The S&P 500 .SPX, .SPX lost 100.12 points, or 1.84%, while Nasdaq .IXIC lost 417.98 points, or 2.43% in the previous session.
Australian miners .AXMM fell 2.6% amid a broad-based sell-off, trading at their lowest levels since early November 2022. Shares of mining behemoths BHP BHP.AX and Rio Tinto RIO.AX slipped 2.1% and 1.8%, respectively.
Energy stocks .AXEJ tracked global oil prices lower after they dropped to an eight-month low as U.S. recession fears weighed. The Australian sub-index lost 3% to record its lowest levels since mid-July 2022, with sector heavyweights Woodside WDS.AX and Santos STO.AX each down more than 2%.
Brent crude LCOc1 futures fell 0.2% to $76.66 a barrel while U.S. West Texas Intermediate (WTI) crude CLc1 lost 0.33% to $73.28 per barrel.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 dropped 1.6% to 12,252.63 points.
Reporting by Roshan Thomas and Ayushman Ojha in Bengaluru; Editing by Sherry Jacob-Phillips
For more information on DIARIES & DATA: U.S. earnings diary RESF/US Wall Street Week Ahead .N/O Global Economy Week Ahead DATA/ ................................................................ For latest top breaking news across all markets NEWS1
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
