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Australian shares fell on Wednesday, driven down by losses in heavy-weight miners and financial stocks. Investors' attention was squarely on the upcoming release of U.S. inflation data and the Federal Reserve's policy announcement, which are expected to significantly impact market movements.
The S&P/ASX 200 index dropped by 0.60% to 7,709.1 points, touching its lowest level in over a week. This decline reflects the market's caution as traders anticipate the potential implications of U.S. economic data on future monetary policy.
Focus on Federal Reserve and RBA Meetings
In addition to U.S. inflation data, which could influence the timing of the Federal Reserve's monetary policy easing, traders were keenly watching the outcome of the central bank's two-day policy meeting scheduled for later in the day. This meeting is expected to provide critical insights into the Fed's future actions regarding interest rates.
Back in Sydney, the Reserve Bank of Australia (RBA) is also set to hold its two-day monetary policy meeting next week. Analysts at ANZ Research have adjusted their expectations, now predicting the first cash rate cut by the RBA in February 2025, with further easing anticipated shortly thereafter, potentially in April or May.
Mining Sector Hit Hard by Falling Iron Ore Prices
Mining stocks suffered significant losses, falling as much as 1.1% to their lowest levels since 27 March, primarily due to declining iron ore prices. Major mining companies, including Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG), saw their shares drop by 1.3% and 1.4%, respectively.
Adding to the sector's woes, Australia's mining and energy union announced it had filed for "same job same pay" orders covering 1,700 labor-hire coal mine workers at three large BHP coal mines in Queensland. This announcement led to BHP (ASX: BHP) shares falling by 1.5%, marking their lowest point since May 14.
Financial Stocks and Gold Also Decline
Rate-sensitive financial stocks fell by as much as 0.6%, with the "Big Four" banks—Commonwealth Bank, Westpac, ANZ, and NAB—losing between 0.4% and 0.7%. This decline reflects the market's anticipation of potential interest rate movements and their impact on the financial sector.
Gold stocks also experienced a downturn, falling as much as 0.8% to their lowest level since early April, despite firming bullion prices. This suggests that broader market sentiments are overshadowing the positive movements in gold prices.
Energy Stocks Gain Amid Rising Oil Prices
In contrast to the overall market trend, energy stocks gained as much as 0.6%, tracking higher oil prices. Major energy companies Woodside Energy (ASX: WDS) and Santos (ASX: STO) saw their shares rise by 1.6% and 0.7%, respectively. This increase is attributed to the strengthening oil market, which has provided a boost to the energy sector.
New Zealand Market Trends
Across the Tasman Sea, New Zealand's S&P/NZX 50 index fell by 0.1% to 11,776.64 points. The benchmark is on track to record losses for the fifth consecutive session, reflecting ongoing market challenges.
