Australian Share Market Stagnates Amid Interest Rate Worries

Australia's share market has stagnated at the start of the week due to concerns over interest rates, rising bond yields, and steady oil prices.

The benchmark S&P/ASX200 index dropped by 0.8 points by midday on Monday, resulting in a 0.01% decline to 8,730.4. The broader All Ordinaries also lost ground, falling 1.9 points or 0.02%, to 8,920.8.

Moomoo chief market strategist Tapas Strickland highlighted the significance of upcoming events, including Australian employment figures and the Reserve Bank's September board meeting. Strickland noted that central bank governor Michele Bullock has acknowledged the need to tame high inflation and its economic impacts.

'For investors, the key question is whether the bank is willing to generate a greater slowing in the economy to tackle inflation,' Strickland said. Financial markets are currently pricing in an 87.9% chance of a rate hike next week, with another rise fully priced in for early 2027.

Oil prices have eased to their lowest level in over ten days due to resilient Saudi crude exports and the ongoing US-Iran stalemate. Woodside dipped by 1.7%, while Santos edged higher, and refinery operators Viva and Ampol traded lower.