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Australian equities weakened this week as investors turned cautious before the Reserve Bank of Australia�s upcoming policy announcement. The S&P/ASX 200 index dropped 0.5% to 8,838.40 after gaining 0.4% in October. Selling pressure was seen across banks and real estate counters, with Westpac falling 0.7% following a decline in annual profit. Commonwealth Bank and National Australia Bank also slipped, while rate-sensitive property and healthcare stocks retreated. Investor sentiment was affected by a strong September inflation reading and hawkish comments from global central bankers.
Australian shares edged lower this week, weighed down by financial and real estate sectors as investors awaited the Reserve Bank of Australia?s (RBA) policy decision. The benchmark S&P/ASX 200 index fell 0.5% to 8,838.40, giving up some of last month?s 0.4% gain. Advertisement
The market?s focus remained on the RBA?s decision expected shortly, as investors looked for signals on the direction of interest rates. The central bank is widely expected to keep rates unchanged, with economists in a Reuters poll indicating that the next and final rate cut of the current cycle may not come until 2026. The cautious mood followed a stronger-than-expected inflation report for September, which reduced expectations of near-term policy easing.
Within the financial sector, the banking index slipped 0.6%. Commonwealth Bank of Australia dropped 0.8%, while National Australia Bank declined 0.6%. Analysts noted that although higher interest rates support bank margins, they tend to curb demand for new loans and can raise the risk of bad debts. Westpac Banking Corporation, the country?s third-largest lender by market value, fell 0.7% after reporting a drop in annual profit caused by rising operational costs and tight margin competition.
Rate-sensitive real estate stocks declined 1% as investors grew cautious about the outlook for borrowing costs. Healthcare shares were also weaker, falling 1.2% over the session.
Mining counters registered mild losses, with gold miners down 0.8% after bullion prices slipped about 1% late last week. Broader mining stocks fell 0.2%, dragged by lower iron ore and copper prices. Shares of BHP Group eased 0.1%. Meanwhile, energy companies gained ground, rising 0.6% as global oil prices inched higher.
Investor sentiment was also influenced by hawkish remarks from several U.S. Federal Reserve officials, which echoed Chair Jerome Powell?s recent statements. The comments reinforced the view that interest rates may stay elevated for longer, leading to a cautious trading tone in regional markets.
Across the Tasman Sea, New Zealand?s benchmark S&P/NZX 50 index slipped 0.2% to 13,513.32, mirroring the broader weakness in regional equities.
Source Reuters
5th Jun, 2025
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