Australian shares fell to a two-week low in early trade on Thursday, pressured by declines in mining and gold sectors as the US Federal Reserve’s cautious stance on interest rate cuts and weaker commodity prices weighed on investor sentiment.
By 0039 GMT, the S&P/ASX 200 index had dropped 0.2 percent to 8516.2, marking its lowest point since June 4. The benchmark had closed 0.1 percent lower on Wednesday.
On the global stage, investors reacted to the Fed’s decision to maintain current rates while keeping open the possibility of two cuts this year. However, Fed Chair Jerome Powell delivered a cautious message, warning that inflation may rise due to increased costs for consumers stemming from the Trump administration’s proposed import tariffs.
Back in Australia, mining stocks slipped 1 percent, hitting their lowest levels since May 2 amid falling iron ore prices linked to slowing demand in China, the world’s largest steel producer. Major miners BHP Group and Rio Tinto lost 0.5 percent and 0.1 percent, respectively.
Gold shares dropped 1.7 percent to their lowest since May 22, as gold prices softened following the Fed’s hints at a slower pace of future rate cuts.
Conversely, the financials sub-index edged up 0.3 percent, with the “Big Four” banks posting gains ranging from 0.2 to 0.7 percent. National Australia Bank shares rose 0.7 percent despite the bank facing a A$751,200 penalty for alleged breaches of consumer data rights.
Energy stocks declined 0.7 percent despite rising oil prices. Oil and gas companies Woodside Energy and Santos fell 1.2 percent and 0.3 percent, respectively.
Meanwhile, New Zealand’s benchmark S&P/NZX 50 index remained mostly steady at 12,600.23 points. The country’s economy grew faster than expected in the first quarter, allowing the Reserve Bank of New Zealand more flexibility on timing future interest rate cuts.
