Australian shares have fallen, dragged lower by mining stocks, with investors globally maintaining a cautious stance over rate-hike worries and as tightening COVID-19 restrictions in Shanghai fuelled concerns about a possible recession.
- ASX 200 has dropped 3.4 per cent in two days
- Nasdaq, S&P post longest losing streaks in a decade
- European stocks post worst week in two months
Chinese authorities reinforced the lockdown in Shanghai they imposed more than a month ago as part of their tough COVID-19 response policy that has hit economic activity.
On the domestic bourse, ASX 200 closed down 85 points, or 1.2 per cent, to 7,121, with the real estate, technology and materials sectors leading the losses.
The Australian dollar dropped below 70 US cents for the first time since January.
Miners tracked lower iron ore prices and slumped 2.5 per cent.
Sector heavyweights BHP, Rio Tinto and Fortescue Metals Group were down between 1.3 per cent and 5.8 per cent.
Financials lost 0.3 per cent while Westpac gained 3.2 per cent, to $24.60, after reporting a $3.1 billion cash profit for the first half.
The bank said continued margin pressure from competition in mortgage lending caused its first-half earnings to drop more than 12 per cent from a year ago, but it forecast lower expenses in the second half of the year, with its cost-reset plan in full swing.
The company also declared an interim dividend of 61 cents per share, compared with 58 cents last year.
Suncorp dropped 0.3 per cent to $11.28 after reporting an $803 million growth in its home-lending portfolio in the March quarter.
Shares of Magellan plunged 8.4 per cent on news about selling its shares in takeaway fast food chain Guzman y Gomez (GYG) for a cash consideration of $140 million.
Technology stocks, which slumped 3.2 per cent, were the top-percentage losers in the benchmark, while gold stocks dropped 3.4 per cent.
Domestic energy stocks were up 0.5 per cent after crude prices rose last week on supply concerns.
Among the worst performers were Nvonix (-12.3pc), Imugege (-11.1pc), News Corp (-8.3pc), Block (-6.2pc) and Telix Pharmaceuticals (-7.3pc).
On the flip side, Domino’s Pizza climbed 2 per cent, CSL gained 0.8 per cent while Polynovo advanced 3.3 per cent.
Global markets decline
Trade was volatile on Wall Street on Friday.
The major indices rose briefly into the green and the Nasdaq fell as much as 2.7 per cent.
Both the Nasdaq and the S&P 500 posted their fifth-straight week of declines, and the Dow its sixth.
It was the longest losing streak for the S&P 500 since mid-2011 and, for the Nasdaq, since late 2012.
The Dow Jones Industrial Average fell 0.3 per cent, the S&P 500 lost 0.6 per cent, and the Nasdaq Composite dropped 1.4 per cent.
“The market is focused on the Fed being behind the curve and that’s why the market is down,” said Keith Lerner, chief market strategist and co-chief investment officer at Truist Advisory Services.
Fed funds futures priced in a roughly 75 per cent chance of a 75-basis-point interest rate hike at next month’s Fed policy meeting, even after Fed chair Jerome Powell said on Wednesday that the US central bank was not considering such a move.
The pan-European STOXX 600 index fell 1.9 per cent, as regional shares chalked up their worst week in two months.
MSCI’s gauge of global equity performance shed 1 per cent, and emerging market stocks lost 2.6 per cent.
Oil prices climbed for a third-straight session, shrugging off concerns about global economic growth as impending European Union sanctions on Russian oil raised the prospect of tighter supply.
Brent crude oil was slightly down this morning, trading at $US111.88 a barrel.
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