Australia's sharemarket slid to a 15-week low last week as investors rotated into defensive corners ahead of a widely expected interest-rate hike from the Reserve Bank of Australia on Tuesday.
The benchmark S&P/ASX 200 fell 0.76% over the week to close at 8,665 points, touching a 15-week intraday low on Friday. Consumer staples and healthcare were the only two sectors to finish in the green — up 0.78% and 0.09% respectively — as traders sought shelter. Utilities sank 5.23%, communication fell 2.91% and energy dropped 1.55%, according to CommSec data.
Markets are now pricing in a roughly 95% chance that the RBA will lift the cash rate to 4.60% this week, with many experts expecting another move in November — which would make it the fifth hike of the calendar year. Inflation remains above the RBA's 2% to 3% target band, and last week Governor Michele Bullock warned of "materialising" upside risks. Trading Economics analysts put the chance of a 25-basis-point move in September at 95%, with the peak rate possibly reaching 5.10%.
The sell-off had global fuel. Uncertainty around US–Iran negotiations kept oil prices elevated — Brent traded around $104.32 — feeding inflation anxiety and a renewed rout in global bond markets. The US 10-year Treasury yield climbed to 5.18%, its highest since 2007, after the Federal Reserve raised interest rates for the first time in three years earlier this month, while strong US business activity has increased bets on another Fed move.
Among the few bright spots, Woolworths rose 0.63% to $38.47 and Coles edged up 0.3% to $23.19. Inghams jumped 10.99% to $2.12 after PSP Investments took a 5.62% stake, while Treasury Wine Estates lifted 5.24% to $5.42. On the other side, the A2 Milk Company fell 5.5% to $6.65.
Sources:
- Investors get defensive as ASX 200 drifts to a 15-week low — The Motley Fool Australia
- ASX 200 weekly wrap: lowest close since June — Swingfolio
The benchmark S&P/ASX 200 fell 0.76% over the week to close at 8,665 points, touching a 15-week intraday low on Friday. Consumer staples and healthcare were the only two sectors to finish in the green — up 0.78% and 0.09% respectively — as traders sought shelter. Utilities sank 5.23%, communication fell 2.91% and energy dropped 1.55%, according to CommSec data.
Markets are now pricing in a roughly 95% chance that the RBA will lift the cash rate to 4.60% this week, with many experts expecting another move in November — which would make it the fifth hike of the calendar year. Inflation remains above the RBA's 2% to 3% target band, and last week Governor Michele Bullock warned of "materialising" upside risks. Trading Economics analysts put the chance of a 25-basis-point move in September at 95%, with the peak rate possibly reaching 5.10%.
The sell-off had global fuel. Uncertainty around US–Iran negotiations kept oil prices elevated — Brent traded around $104.32 — feeding inflation anxiety and a renewed rout in global bond markets. The US 10-year Treasury yield climbed to 5.18%, its highest since 2007, after the Federal Reserve raised interest rates for the first time in three years earlier this month, while strong US business activity has increased bets on another Fed move.
Among the few bright spots, Woolworths rose 0.63% to $38.47 and Coles edged up 0.3% to $23.19. Inghams jumped 10.99% to $2.12 after PSP Investments took a 5.62% stake, while Treasury Wine Estates lifted 5.24% to $5.42. On the other side, the A2 Milk Company fell 5.5% to $6.65.
Sources:
- Investors get defensive as ASX 200 drifts to a 15-week low — The Motley Fool Australia
- ASX 200 weekly wrap: lowest close since June — Swingfolio
