Australian shares experienced a decline on Thursday, primarily driven by losses in financial and mining stocks. This cautious sentiment among investors was prompted by the release of minutes from the June policy meeting of the U.S. Federal Reserve, which affirmed expectations of prolonged higher interest rates. The S&P/ASX 200 index dropped 0.9% to reach 7,189.1 points, signaling the worst session in almost two weeks.
The decline was led by major financial stocks, which fell as much as 0.9%, marking the most significant decrease since June 26. All four major banks, commonly known as the big four, experienced losses ranging from 0.5% to 1.0%. Magellan Financial Group, the top performer on the broader benchmark, witnessed a significant drop of 6.2% after reporting a decline in funds under management along with outflows in June.
Mining stocks followed suit, shedding 1.8% as copper prices fell overnight due to negative overseas data which impacted the demand outlook for growth-dependent metals. Mining giants Rio Tinto and Fortescue Metals both experienced losses of over 1.3%.
Additionally, Bubs Australia saw its shares retreat by 8.9%, despite launching a five-point plan aimed at effectively managing working capital and optimizing its portfolio. Energy stocks also experienced a decline of 0.6%, with major oil companies Woodside Energy and Santos losing 0.5% and 0.9% respectively. Gold stocks slipped by 1.7%, while technology stocks struggled to find direction and marginally fell by 0.03%.
In contrast to the overall Australian market performance, New Zealand’s S&P/NZX 50 index rose by 0.1% to reach 12,008.3 points. This marks the index’s eighth consecutive session of gains. Shares in Vista Group International increased by 7.1% after the film technology provider announced plans to reduce its global workforce by 6%-8% in an effort to achieve positive cash flow a year earlier than planned.
Despite the decline in Australian shares, it is important to maintain a balanced view of the situation, considering different perspectives and opinions. The market sentiment was primarily influenced by cautiousness related to the U.S. Federal Reserve’s expected interest rate policy. Investors are closely monitoring these developments as they can have a significant impact on the financial and mining sectors, as well as the broader Australian economy.
