Australian market slides as financial, gold stocks weigh down amid ongoing rate worries

Australian stock markets experienced a widespread decline on Monday, driven by weakness in financial stocks, persistent concerns about interest rates, and anticipation of crucial US inflation data.

The S&P/ASX 200 index closed 0.4 per cent lower at 6,948.800 points, marking its lowest closing level since November 2, following a 0.6 per cent drop on Friday.

The Reserve Bank of Australia (RBA) sounded a warning on Friday, highlighting the potential for further inflationary surprises due to domestic cost pressures and hinting at the likelihood of additional interest rate hikes to curb inflation. Market analyst Tony Sycamore of IG Australia noted that investors were keeping a close eye on upcoming local wages and employment data.

He suggested that if these data points come in hotter than expected, it could increase the likelihood of another RBA rate hike, which could be met with scepticism given the RBA’s recent more dovish stance.

In Sydney, the financials index, a significant market player, closed 0.5 per cent lower. ANZ Group, one of the ‘Big Four’ banks, led the decline with a 3 per cent drop to reach a two-week low after reporting annual profits below estimates. This dragged the sub-index to its lowest closing level since November 2.

Gold stocks faced a challenging session, marking their fifth consecutive day of declines with a 1.3 per cent drop as gold prices struggled in the face of a stronger US dollar. Northern Star Resources and Evolution Mining saw declines of 2.6 per cent and 1.6 per cent, respectively.

Energy stocks also contributed to the market’s losses, falling by 0.9 per cent, primarily due to global concerns over weakening demand in the United States and China, leading to a drop in oil prices.

In company news, TPG Telecom of Australia terminated discussions with the Macquarie-backed Vocus Group regarding the sale of some non-mobile fibre assets for approximately A$6.3 billion ($4 billion). This decision led to an 11.7 per cent decline in TPG Telecom’s shares, bringing them to their lowest closing level since July 7.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.4 per cent to 11,093.03, marking its lowest closing level since November 2.

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