Key Takeaways
- Australian shares dropped to a six-week low on Thursday.
- Oil prices surpassed $100 per barrel due to Middle East tensions.
- Inflation concerns and potential interest rate hikes affected financial and real estate sectors.
Australian shares fell to a six-week low on Thursday, with the S&P/ASX 200 index down 1.4% at 8,785.20 as of 0020 GMT. This decline marked its lowest point since July 27.
Escalating tensions in the Middle East, which led to attacks on tankers by Iran and the United States, pushed oil prices above $100 per barrel, intensifying inflation concerns.
The oil shock has already impacted Australian consumer prices, leading to a stronger-than-expected monthly inflation reading. This has increased expectations of a fourth interest rate hike by the Reserve Bank of Australia (RBA) this year.
Financials declined 1.3% to their lowest point since mid-June, with all “Big Four” banks losing between 1.3% and 1.8%. The major lenders are feeling the impact of higher interest rates and recent tax policy changes on their home-loan application volumes.
Real estate and consumer discretionary stocks also added to the broader losses, down 1.3% and 0.9%, respectively. The mining sub-index slipped 2.2% to a three-week low, with shares of BHP, Rio Tinto, and Fortescue touching their lowest levels in around a week.
Among gold miners, Northern Star Resources and Evolution Mining declined 1% and 1.6%, respectively. Energy stocks bucked the rally in crude prices to fall 0.3%, weighed down by a 0.3% decline in index heavyweight Woodside Energy. However, the sub-index has gained about 3.3% so far this week.
Healthcare stocks fell 0.8% while the industrials sub-index lost 1%. The overall market sentiment was negatively affected by the global risk concerns arising from the Middle East tensions.
In New Zealand, the benchmark S&P/NZX 50 index edged 0.4% lower to a one-week low of 13,760.36.
