RBA Rate Hike Fears Sink ASX for Third Straight Week
The Australian stock market experienced its third consecutive week of losses, despite initial gains on positive oil news. The benchmark ASX 200 index closed virtually flat, down just 1.20 points or 0.01 percent to 8731.20.
The Reserve Bank of Australia's (RBA) governor, Michele Bullock, weighed in on the market with comments suggesting that interest rates may need to be raised further to combat inflation. This sent shockwaves through the financial sector, causing shares to reverse course and fall. The RBA is set to meet on September 28-29, and markets are now pricing in a 95 percent chance of another rate hike.
The RBA's comments had a significant impact on the market, with big four banks all falling. Commonwealth Bank was down 1.03 percent to $152.43, National Australia Bank slumped 1.91 percent to $38.47, Westpac slipped 0.23 percent to $34.75, and ANZ stumbled 0.26 percent to $37.68.
On the other hand, mining stocks rallied on Friday. BHP was up 1.40 percent to $61.05, Rio Tinto added 0.84 percent to $167.49, Northern Star Resources jumped 2.40 percent to $22.21, Evolution Mining surged 4.42 percent to $13.70, and Newmont Corporation rallied 2.48 percent to $175.87.