Banks, real estate pull Australian shares down over 1% as US rate cut bets ease

Scentre

03/04/2024 06:32

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      Banks lose 1.3%; CBA down 1.9%
    

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      Healthcare, tech shares down 1.5% and 4% respectively
    

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      U.S. job data dampens rate cut hopes
    

  
 (Updates to close)
    By Rajasik  Mukherjee
       April 3 (Reuters) - Australian shares slumped the most
in over three weeks on Wednesday, as rate-sensitive sectors such
as banks, technology, and real estate took a beating due to
upbeat U.S. economic data that prompted investors to dial back
their rate-cut bets.
    The S&P/ASX 200 index  .AXJO  fell 1.3% to finish the day at
7,782.500 points. The benchmark ended 0.1% lower on Tuesday
after it scaled a record high earlier that day.
    Upbeat manufacturing and labour market data from the United
States revived fears over the quantum of the U.S. Federal
Reserve easing this year, also influencing domestic investors'
rate cut expectations from the Reserve Bank of Australia (RBA).
    According to the RBA rate tracker monitored by the
Australian bourse operator, market expectations of a rate cut in
May have reduced to 8% on Tuesday from 18% two weeks earlier.
    "The RBA wants to cut rates as the property bubble is
looking shaky but they cannot move ahead of Fed and risk
currency devaluation raising inflation," Mathan Somasundaram,
CEO at Deep Data Analytics said.
    Domestic banks and property sectors, which benefited from
lower rates, are now pulling back on rate cut delays,
Somasundaram said, adding that retail, consumer spending and
asset managers are also likely to see similar downside risk in
April.
    Heavyweight banking sector  .AXFJ , which comprises a
quarter of the benchmark, fell 1.3% to mark its worst day in
nearly three weeks.
    The "Big Four" lenders lost between 1.2% and 1.9%, with top
lender Commonwealth Bank of Australia  CBA.AX  declining almost
2%.
    Real estate stocks  .AXRE  lost 3.2%, with shopping centre
operator Scentre Group  SCG.AX  and integrated property group
Goodman Group losing 3.4% and 2.6%, respectively.
    Heavyweight miners  .AXMM  shed 0.7%, while information
technology stocks  .AXIJ  and healthcare firms  .AXHJ  lost 4%
and 1.5%, respectively.
    In New Zealand, the benchmark S&P/NZX 50 index  .NZ50  lost
0.5% to finish the session at 12,040.4900 points.  

 (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Janane
Venkatraman
)
 ((Rajasik.Mukherjee@thomsonreuters.com))
 
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