Australia: Shares hit 2-week low as miners, gold stocks fall; Fed holds rate

AUSTRALIAN shares hit a two-week low in early trade on Thursday, weighed down by miners and gold stocks as the US Federal Reserve’s cautious tone on rate cuts and softer commodity prices dampened investor sentiment.

The S&P/ASX 200 index was down 0.2 per cent at 8516.2 by 0039 GMT, hitting its lowest level since June 4. The benchmark ended 0.1 per cent lower on Wednesday.

Globally, investors assessed the Fed standing pat on its rates as the US central bank kept the doors open for two cuts this year.

However, the Fed Chair Jerome Powell struck a cautious tone as he said that inflation was expected to rise ahead with consumers paying more for goods due to Trump administration’s planned import tariffs.

Back on the bourse, miners fell 1 per cent, hitting their lowest level since May 2 as iron ore prices fell on slowing demand for the steelmaking material in top consumer China.

Mining giant BHP Group shed 0.5 per cent while iron ore miner Rio Tinto lost 0.1 per cent.

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Gold stocks lost 1.7 per cent, hitting their lowest level since May 22 as prices of the yellow metal fell after the Fed hinted at slower pace of future rate cuts.

Financials sub-index inched 0.3 per cent higher, with the “Big Four” banks gaining between 0.2 per cent and 0.7 per cent.

Among corporate news, the National Australia Bank had to fork out A$751,200 over alleged breaches of consumer data right rules. Shares of NAB rose 0.7 per cent.

Energy stocks declined 0.7 per cent despite an increase in oil prices.

Oil and gas major Woodside Energy fell 1.2 per cent and smaller peer Santos lost 0.3 per cent.

New Zealand’s benchmark S&P/NZX 50 index was largely unchanged at 12,600.23 points.

The country’s economy grew faster than expected in the first quarter, thus giving the central bank more time to consider when it needs to cut interest rates again. REUTERS