Why Australian equity markets are on track for losses? | AU Market Updates

Australian equity markets are on track to report losses for the week and the day. The fall in the benchmark index is broad-based, and each of the subsector indexes are tracking lower today. ASX 200 is down nearly 126 points at the close.

Rising risk-free rates across the board have forced the investors to sell stocks. Australian bond yields have climbed up significantly this week, driven by a global surge in sovereign bond yields. Investors are dumping risk-free assets as economic uncertainties are fading.

Over the week, investor sentiment has remained bullish on cyclical stocks, which are relatively more sensitive to economic activities. Industrials, energy, materials, consumer discretionary, financials are the sectors to keep a close watch.

The Reserve Bank of Australia would be looking at the matter of the rising Australian Dollar. Given the level of increase in bond yields, the bank may choose to raise the intensity of bond purchases to have a more significant impact on yields.

The yield on the Australian ten-year bond was around 1.84%. Commodity prices were largely higher today with gains in iron ore, copper, coal, oil, but gold and silver prices were tracking lower.

Silver Lake Resources was the highest gainer in the ASX 200 index, followed by Perseus Mining, Lynas Rare Earths, AMP Limited, and Westgold Resource. Most losses were seen in Orica Ltd, Service Stream, PointsBet Holdings, Afterpay, and Kogan.com.

 


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