Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Australia shares close lower as inflation woes dent global equities

Published 12/05/2021, 04:56 pm
Updated 12/05/2021, 05:00 pm
© Reuters.

* Tech stocks up 2% despite overnight sell-off in U.S. peers

* Travel stocks fall as border reopening pushed to mid-2022

* ANZ, NAB and Westpac down between 0.6% and 1.2% (Updates to close)

By Savyata Mishra

May 12 (Reuters) - Australian shares fell on Wednesday, dragged down by financials and miners, as global investors fretted over whether a potential spike in U.S. inflation could force the Federal Reserve to raise rates earlier than planned.

The S&P/ASX 200 index .AXJO dropped 0.7% to 7,044.9, settling lower for the second straight session.

Investors remained on edge ahead of U.S. inflation data due later in the day, as rising commodity prices boosted inflation expectations and lifted U.S. Treasury yields while hurting growth stocks, leading to a drop in global equities. finance stocks .AXFJ ended lower despite a 0.7% gain in Commonwealth Bank CBA.AX , while energy stocks .AXEJ were the biggest percentage losers, closing 0.7% lower.

Top miners BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX lost 0.8% and 0.4%, respectively. China's Dalian Commodity Exchange proposed certain changes in its flagship futures that could result in tempering of prices, a potential blow to Australian miners which are a major producer of high quality iron ore. and tourism stocks fell after the government said international travel was not expected to resume before mid-2022. Flag carrier Qantas QAN.AX lost 3.9%.

Tech stocks .AXIJ rebounded despite a slump in their U.S. peers overnight. Afterpay APT.AX jumped as much as 6%, recovering from a more than 8.5% drop in the previous session.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

"The last two-three years, buying the dip in growth/tech stocks has been a winning strategy and such that we are getting investors trying to pick the bottom," said Mathan Somasundaram, founder of Deep Data Analytics.

"If the U.S. Fed steps into buy bonds and keep real yields negative tonight, then you might see a short-covering rally in tech. If not, tech will continue to slide."

Australia's federal budget announced late on Tuesday promised billions of dollars of new spending, and was largely in line with expectations. Zealand's benchmark S&P/NZX 50 index .NZ50 slipped 0.6% to close at 12,564.2.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.