Australian Sharemarket Crashes Amid Rate Hike Fears and Trump Warning

The Australian sharemarket took a hit on Wednesday due to fears of multiple interest rate hikes and US President Donald Trump's warning that he won't sign a 'worthless' deal with Iran.

The benchmark ASX 200 slumped 88.30 points or 0.97 per cent to 8978.40, while the broader All Ordinaries fell 100.60 points or 1.09 per cent to 9160.30.

Australia's dollar also slipped against the greenback, trading at 71.42 US cents.

The mining sector was particularly hard hit, with gold prices falling back below $US4300 ($A6017) an ounce due to rising inflation and rates fears.

Northern Star Resources dropped 4.69 per cent to $22.58, Evolution Mining fell 1.94 per cent to $14.63, and Newmont slid 3.25 per cent to $170.31.

Meanwhile, the technology sector was also impacted by interest rate sensitive stocks, including Xero, which dropped 2.47 per cent to $81.22, WiseTech Global, down 5.16 per cent to $37.65, and Life360, which fell 4.81 per cent to $19.20.

According to VanEck's head of investments and capital markets Russel Chesler, the stronger-than-expected GDP figures give the Reserve Bank of Australia 'the green light to lift interest rates.'

He predicted that the RBA may need to raise rates not once but twice before the end of this year to tame inflation back to its 2 to 3 per cent target.