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DailyBubble News

ASX passes two-month low on US Fed’s hawkish stance; banks, tech stocks weigh

Australian shares have hit a more than two-month low, as investors returning to trading after a one-day holiday exited riskier assets following the US Federal Reserve reiterating its hawkish monetary policy outlook to fight soaring inflation.

The ASX 200 was down 111 points or 1.7 per cent to 6,590 at midday, with almost all sectors in red.

At the same time, the Australian dollar was down at 66.36 US cents. 

Financials led the laggards, shedding about 1.7 per cent and losing for the sixth straight week, with the country’s largest banks falling between 1.3 per cent and 1.6 per cent.

The technology index lost about 3.7 per cent to hit its lowest since mid-July, with tech stocks tracking their peers on the Nasdaq.

Accounting service providers Xero and Block dropped 6.1 per cent and 8.7 per cent, respectively.

Healthcare stocks suffered a similar fate, skidding 1.4 per cent, with index major CSL falling 1.1 per cent.

Miners provided some respite to an otherwise negative benchmark, rising 0.1 per cent, as iron ore prices rebounded in China upon higher demand for the steel-making ingredient.

The major mining trio Rio Tinto, BHP and Fortescue rose in the range of 1 per cent and 1.7 per cent.

OZ Minerals shares rose 1.1 per cent, after the miner said it would would invest about $US1.13 billion ($1.7 billion) to develop the West Musgrave copper-nickel project in Western Australia, as it looks to cash in on increasing demand for battery metals.

Stocks slump on Wall Street and in Europe

Shares tumbled globally on Thursday, after the US Fed lifted rates by an expected 75 basis points on Wednesday and signalled a longer trajectory for policy rates than markets had priced in, fuelling fears of further volatility in stock and bond trading in a year that has already seen bear markets in both asset classes. 

The US central bank’s projections for economic growth, released on Wednesday, were also eye-catching, with growth predicted to be just 0.2 per cent this year, rising to 1.2 per cent for 2023. 

Read More: ASX passes two-month low on US Fed’s hawkish stance; banks, tech stocks weigh

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