Australian Shares Plummet as Rate Hike Expectations Persist

Australian shares plummeted over 1% on Wednesday after second-quarter GDP growth slowed, but not enough to deter expectations of another interest rate hike. Despite this, investors remain cautious due to concerns over oil supply disruption and inflation stemming from the renewed US-Iran conflict.

The S&P/ASX 200 benchmark index was down 1.1% at 8,967 points, recovering slightly from its session low of 8,935.10 points. This would be its worst session in nearly three months if current momentum persists.

In New Zealand, the central bank raised its official cash rate by 25 basis points to 2.75%, continuing its efforts to curb inflation. The Reserve Bank of New Zealand signalled further policy tightening is likely but stressed that any additional rate hike would be gradual.