Australian shares dropped on Wednesday, led by declines in the banking and mining sectors. The S&P/ASX 200 index fell 0.6% to 8,731.50 by 0010 GMT, marking its worst day since October 1. The downturn followed hawkish signals from the Reserve Bank of Australia’s meeting minutes, which highlighted persistent inflation concerns driven by strong domestic demand and rising global energy costs. The central bank left open the possibility of a fifth interest rate hike this year, further weighing on investor sentiment.
Inflation worries intensified amid escalating tensions in the Middle East, particularly with attacks on Saudi Arabia. Commonwealth Bank of Australia CEO Matt Comyn reinforced these concerns during the bank’s annual general meeting, stating that inflation remains too high despite slowing growth and higher interest rates. The banking sector slumped 1.5%, with all four major Australian banks experiencing declines between 1.5% and 2.5%. Miners also underperformed, falling 0.2% due to weaker copper prices. Rio Tinto, the world’s largest iron ore producer, reported a strong third-quarter production update but saw its shares dip 0.5%.
Tech stocks declined 0.2%, following a drop in the Nasdaq overnight. WiseTech Global and Xero led the losses in the sector, falling 0.7% and 1.2%, respectively. In contrast, energy stocks gained 0.7%, with Woodside Energy and Santos rising 0.7% and 1.8%, respectively. Gold miners fell 0.8% due to weakening bullion prices, while Glencore’s shares began trading on the Australian bourse, aiming to attract investor interest in copper exposure.