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Australian shares ended lower as weakness in banking and real estate stocks pulled the broader market down, while investors remained cautious ahead of key inflation data expected this week. Market sentiment was also influenced by ongoing discussions around a possible peace agreement between the US and Iran, though officials indicated that a final deal was still not close. Rate-sensitive sectors faced pressure as traders assessed the Reserve Bank of Australia’s likely policy path. Meanwhile, New Zealand markets moved higher ahead of the country’s central bank policy meeting, where interest rates are widely expected to remain unchanged.
Australian equities slipped during the latest trading session as losses in banking and real estate counters dragged the benchmark index lower. Investors remained cautious ahead of the country’s monthly inflation reading scheduled for release on Wednesday, which is expected to provide further clarity on consumer price trends and the Reserve Bank of Australia’s future interest rate decisions. Advertisement
The S&P/ASX 200 index fell 0.5% to 8,648.40 points, marking its sharpest single-day decline since the previous week. The benchmark had ended the earlier session with moderate gains.
Global developments also remained in focus after Iranian officials travelled to Doha for discussions with Qatar’s Prime Minister regarding a possible peace arrangement with the United States. However, both Tehran and Washington reportedly indicated that an agreement was not expected immediately, keeping uncertainty around geopolitical risks intact.
Market participants are closely tracking inflation data as it could influence the Reserve Bank of Australia’s next move on interest rates. Current market pricing indicates a nearly 42% possibility of a 25-basis-point rate hike in August, while expectations remain strong that the central bank may leave the cash rate unchanged in the near term.
Financial stocks emerged among the biggest laggards, with the sector index declining 1.1%, its weakest performance in several sessions. Australia’s four major banks traded lower in the range of 0.3% to 0.9% amid concerns over interest rate sensitivity and broader market caution.
The real estate index also witnessed heavy selling pressure, falling as much as 1.8% and touching its lowest level since the previous week. Data centre-focused landlord Goodman Group declined 3.7%, while shopping centre operator Scentre Group edged 0.3% lower.
Mining and gold stocks remained subdued during the session. The gold sector index slipped 0.5%, while the broader mining sub-index was marginally lower. Technology shares also weakened, with the sector index easing 0.4%.
In contrast, energy and healthcare stocks managed modest gains despite the broader market weakness, with both sectors inching 0.1% higher.
Among individual companies, stock exchange operator ASX Ltd recorded one of the sharpest declines on the benchmark index, tumbling 9.1%. The fall came after the company flagged expectations of higher expenses in fiscal 2027, marking its worst trading session since mid-2023.
Meanwhile, New Zealand’s benchmark S&P/NZX 50 index outperformed regional peers, rising 1.2% to 13,119.79 points and heading for its strongest session in over a week. Investors are now awaiting the Reserve Bank of New Zealand’s upcoming monetary policy meeting, where markets are largely expecting the cash rate to remain steady at 2.25%.
Source Reuters
5th Jun, 2025
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