AUS
NZ
UK
CA
USA
IND
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Highlights
- S&P/ASX 200 index down 0.4%, but still up 0.3% for the week.
- Financials sector drops 0.7%, with major banks losing between 0.4% and 0.7%.
- RBA Governor signals caution on interest rate cuts amid inflation concerns.
Australian shares pulled back on Friday after hitting a record high in the previous session, with financial stocks leading the decline. Investors reacted to comments from the Reserve Bank of Australia (RBA) governor, Michele Bullock, who indicated that the central bank would hold off on cutting interest rates until inflation is firmly within the target range of 2% to 3%.
At 2327 GMT, the S&P/ASX 200 index (AXJO) was down 0.4%, settling at 8,411 points. Despite the drop, the benchmark index managed to gain 0.3% for the week, marking a second consecutive week of growth.
RBA Governor's Cautious Tone on Inflation and Rate Cuts
Bullock's remarks about inflation emphasized the need for clarity before any rate cuts are considered. She stated that policymakers must be confident inflation is trending toward the RBA’s target band before making any moves on rates. Additionally, she downplayed concerns over proposed U.S. tariffs, suggesting they would not significantly impact inflation in Australia over the next six months. These comments sparked investor caution, contributing to the day's market pullback.
Sector Performance: Financials, Energy, and Healthcare Struggles
Among the key sectors, financials suffered the biggest losses, shedding 0.7%. The "Big Four" banks—Commonwealth Bank, Westpac, ANZ, and NAB—each saw declines between 0.4% and 0.7%. This downturn followed a 1.1% drop in the sector for the week, ending its three-week rally.
Energy stocks also faced pressure, losing as much as 0.5%, despite rising oil prices. Woodside Energy (ASX:WDS), a major player in the sector, saw a 0.7% dip.
Healthcare stocks retreated by 0.6%, ending a five-day winning streak. However, the sector still managed a 2.9% increase for the week.
Mining stocks were mostly flat during early trading but ended the week down 0.6%. Heavyweights like BHP Group (ASX:BHP), Rio Tinto (ASX:RIO), and Fortescue Metals (ASX:FMG) posted marginal losses of 0.1% each.
Gold stocks remained largely unchanged despite higher bullion prices, with the sub-index dropping 2.1% for the week.
New Zealand’s Market Shows Modest Gains
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index (NZ50) gained 0.2%, reaching 13,083.52 points. The index is on track to close higher for the second consecutive week, reflecting a more positive outlook compared to the Australian market.
