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Commodity shares lead losses
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All major lenders close lower
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Woodside falls on ex-dividend trading
(Updates to close)
By Rishav Chatterjee
March 8 (Reuters) - Australian shares closed lower on
Wednesday after U.S. Federal Reserve Chair Jerome Powell warned
interest rates might need to go up faster and higher than
expected to control high inflation.
The S&P/ASX 200 index fell 0.8% to 7,307.8, with
commodity stocks leading declines. The benchmark rose 0.5% on
Tuesday.
The Fed will likely need to raise interest rates more than
previously expected in response to recent strong data, Powell
told U.S. lawmakers on Tuesday, sending equities tumbling across
the globe.
Australian shares probably rallied too hard on Tuesday and
have probably fallen too hard on Wednesday, but with another
night of Powell's testimony, people are a bit nervous, said
Henry Jennings, a senior Analyst and portfolio manager at Marcus
Today.
Traders are now anticipating an almost 70% chance of a 50
basis-point rate hike in March, according to CME's FedWatch
tool, up from about a 30% chance a day ago. Meanwhile, Reserve Bank of Australia Governor Philip Lowe
said it was closer to pausing aggressive cycle of rate increases
as policy was now in restrictive territory, and suggested a halt
could come as soon as April.
Miners fell 1.2%, with BHP Group , Rio Tinto and Fortescue Metals shedding between 0.1% and
1.4%.
Energy stocks dropped 4.2% after oil prices
slumped overnight on fears of steeper U.S. rate hikes.
Woodside Energy dropped the most in three months on
ex-dividend trading. The company said it was on track to make a
final investment decision this year on the Trion offshore oil
project.
Banks declined 0.7%, with all the "big four" banks
closing in negative territory. Meanwhile, Commonwealth Bank Of
Australia said its Indonesian unit had been hit by a
cyber attack, involving unauthorised access of a software
application. Its shares fell 0.3%.
Gold stocks plunged 3.4% as bullion prices fell
after Powell's hawkish tone. Northern Star Resources and Newcrest Mining lost 2.8% and 3.4% respectively.
New Zealand's benchmark S&P/NZX 50 index fell 0.5%
to 11,855.5.
(Reporting by Rishav Chatterjee in Bengaluru; Editing by
Subhranshu Sahu)
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