Australian financial markets witnessed a significant downturn on Friday as the benchmark index plunged into negative territory, recording its worst performance in months amid fading hopes for interest rate relief this year.
Market Bloodbath: Key Indexes Hit Multi-Month Lows
The S&P/ASX 200 index dropped 1.5% to settle at 8,623.30 points by 2348 GMT, marking its lowest level since mid-July. This decline followed a 0.5% fall recorded on Thursday, extending the bearish sentiment that has gripped Australian markets throughout the week.
For the weekly performance, the index has shed approximately 1.7%, positioning itself for its third consecutive weekly decline. The weakening sentiment primarily stemmed from major banking stocks facing pressure following Commonwealth Bank's earnings report and disappointing jobs data released on Thursday.
Sectoral Performance: Mining and Financials Lead Decline
The mining sector emerged as one of the biggest casualties, losing 2.7% amid weaker copper prices. Industry giants BHP Group and Rio Tinto both fell by 2% each, contributing significantly to the broader market decline.
However, the mining sub-index presented a contrasting weekly picture, having gained 5.5% over the past five trading sessions. Higher copper prices for most of the week provided support to the sector, while gains in major lithium players such as Mineral Resources boosted overall sentiment.
The financial sector faced even steeper losses, declining as much as 1.9% to hit its worst level since August 14. The 'Big Four' banks led the losses, with the sector losing 3.1% for the week and eyeing its worst weekly performance since March.
Broader Market Impact and Regional Performance
Gold stocks took a substantial hit, falling 4% on the back of lower bullion prices. Despite this daily setback, the sector has risen nearly 10% for the week, potentially recording its best weekly performance since August.
Technology stocks continued the broader decline, falling 4% to hit their lowest level since April 29. The sector tracked its fourth consecutive session of losses and has shed 5% this week, reflecting the risk-off sentiment among investors.
Energy stocks declined 1% as lower global oil prices weighed on the sub-index. Major players Woodside Energy and smaller peer Santos traded largely flat during the session.
The negative sentiment extended to New Zealand markets, where the benchmark S&P/NZX 50 index lost 0.5% to 13,540.70 as of 2348 GMT, indicating regional concerns about economic conditions.
The latest labor market report has reinforced expectations that the Reserve Bank of Australia will maintain current interest rates for an extended period, effectively curbing hopes for a rate cut this year. Higher-than-expected inflation readings earlier this month had already cast doubt on the likelihood of near-term monetary policy easing, prompting economists to push back their forecasts for any policy shift.
