Banks, commodity stocks weigh on Aussie shares; investors eye RBA's next move

Life360

17/05/2023 08:04

* 
      Gold stocks down 1.9%, Miners drop 1%, financials ease
0.6%
    

        * 
      Incitec Pivot down 7.8% - top loser on ASX200
    

        * 
      Wage price index rose 0.8% in March quarter
    

  
 (Updates to close)
    By Ayushman Ojha
       May 17 (Reuters) - Australian shares declined on
Wednesday, weighed by financials and commodity stocks, while
investors continued to ponder over minutes from the Reserve Bank
of Australia (RBA) May meeting, which signalled the need for
more interest rate hikes.
    The S&P/ASX 200 index  .AXJO  fell as much as 0.5% to finish
at 7,199.20, hitting a near two-week low. The benchmark settled
0.5% lower on Tuesday. 
    Investors await the RBA's next move after minutes from the
its policy meeting, which were released on Tuesday, signalled
further rate increases may be required due to persistently high
inflation.
    Meanwhile, data from the Australian Bureau of Statistics
showed that the wage price index rose 0.8% in the March quarter,
offering temporary solace for policymakers who worry a
price-wage spiral may lead to more rate hikes.
    "There is still some wage price pressure there, but it is
not out of control by any means. The reason for weakness in the
local bourse is a follow-on from RBA minutes, which is basically
preparing the market for higher rates that may be coming in the
not too distant future," said Tim Waterer, analyst at Kohle
Capital Markets.
    All eyes are also on the ongoing U.S. debt ceiling talks
while the country's retail sales data for April pointed to
softer consumer spending.
    In Sydney, the heavyweight financials sub-index  .AXFJ 
dropped 0.6%, with three of the so-called 'big four' banks
declining between 0.5% and 1%.
    Among individual stocks, Incitec Pivot Ltd  IPL.AX  fell
7.8% and was the top decliner on the benchmark, after reporting
a drop in half-yearly profit. 
    Tech stocks  .AXIJ  closed 0.9% higher, with Life360 Inc
 360.AX  up 5.7%.
    Gold stocks  .AXGD  dropped 1.9% as bullion prices slipped.
Newcrest Mining Ltd  NCM.AX  and Northern Star Resources Ltd
 NST.AX  fell 2.1% and 1.1%, respectively. 
    Miners  .AXMM  ended 1% lower as iron ore prices pulled back
on weak China economic data. BHP Group Ltd  BHP.AX  and Rio
Tinto Ltd  RIO.AX  both fell.
    In New Zealand, the benchmark S&P/NZX 50 index  .NZ50 
settled marginally higher, to close at 11,951.6.

 (Reporting by Ayushman Ojha in Bengaluru; Editing by Sonia
Cheema)
 ((Ayushman.Ojha@thomsonreuters.com;))
 
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