ASX drops as Fed's Powell says more rate hikes possible

The local share market has returned to its losing ways, dropping across the board after Federal Reserve chairman Jerome Powell poured cold water on the idea of rate cuts this year.

At noon AEDT on Thursday, the S&P/ASX200 index was down 53.9 points, or 0.77 per cent, to 6,961.7. The broader All Ordinaries was down 55.9 points, or 0.78 per cent, to 7,144.8.

Around dawn Australia time, the Fed went ahead with a quarter of a percentage point rate hike, with Powell saying more hikes were possible.

"If we need to raise rates higher, we will," the Fed chairman said in a press conference, adding that "inflation remains elevated".

He said that will happen for the economy is uncertain, but rate cuts this year were not a "baseline expectation".

Anna Stupnytska, global economist at Fidelity International, said a key risk now was that the rate hike proved counterproductive, exacerbating concerns about financial instability and fuelling market turmoil.

"As the crisis in the banking system continues to unfold, we believe the likelihood of a hard landing scenario - our base case for some time - has risen dramatically in recent days," she said.

Every sector of the ASX was in the red at midday, with tech stocks collectively the worst hit, dropping 1.2 per cent. Xero was down 1.7 per cent and Wisetech Global had fallen 0.4 per cent.

The heavyweight mining sector had retreated 0.9 per cent, with BHP down 0.6 per cent, Fortescue Metals falling 2.6 per cent and Rio Tinto subtracting 0.8 per cent.

Goldminers gained ground as the price of the yellow metal hovered around $US1,960 an ounce, an 11-month high.

Evolution was up two per cent, Newcrest had gained 1.1 per cent and Northern Star had added 1.6 per cent.

All the big banks were lower, with NAB the worst laggard, falling 1.0 per cent to $27.78. The other three were down around a third of a per cent.

Washington H Soul Pattinson was up 0.5 per cent to $28.68 as the diversified investment house raised its dividend and declared its regular profit was up 38.4 per cent to $475.7 million for the six months to January 31.

Brickworks had gained 3.1 per cent to $23.755 after "stellar" results from its property division had helped propel it to a record half-year underlying profit of $331 million, up 24 per cent from a year ago.

"Despite increasing interest rates, we are continuing to experience strong demand for prime industrial property," said managing director Lindsay Partridge.

The Australian dollar was buying 67.12 US cents, from 66.94 US cents at Wednesday's ASX close.