Australian Shares Rebound from Higher Unemployment Rate

Australian shares pared their losses on Thursday after data showed the unemployment rate rose more than expected. The S&P/ASX 200 index fell as much as 1.4% earlier in the session, hitting its lowest since June 12. However, it trimmed those declines to be down just 0.8% at 8,693.30 by 0200 GMT.

The Australian Bureau of Statistics reported that net employment rose 39,500 in August from July, exceeding market forecasts for a 20,000 increase. Yet the jobless rate rose to a five-year high of 4.6%, above expectations for a steady 4.5% climb. Reserve Bank of Australia Governor Michele Bullock had said on Tuesday that unemployment between 4.5% and 5.0% could help restrain inflation.

Market pricing showed little change following the data, with investors continuing to price in a 25-basis-point rate increase at the central bank's September 28-29 meeting. Higher interest rates can weigh on equities by raising the cost of financing corporate investment and luring buyers back into the bond market.