Australia’s financial markets concluded their third consecutive week in negative territory as mounting concerns over interest rate hikes and spiraling energy costs triggered recession warnings from leading economists.
The benchmark S&P/ASX 200 index declined 69.40 points (0.82%) to settle at 8428.40, while the broader All Ordinaries index dropped 62.40 points (0.72%) to 8628.30 during Friday’s trading session. Seven of the eleven market sectors finished in negative territory, with materials and financial stocks leading the downturn with losses of 1.61% and 1.09% respectively.
Mining giants faced significant pressure, with BHP retreating 1.82% to $47.47, Rio Tinto plunging 2.93% to $146.92, and Fortescue declining 0.42% to $18.96. The banking sector similarly struggled, as Commonwealth Bank fell 0.9% to $175.64, NAB dropped 2.25% to $45.57, Westpac decreased 1.05% to $40.70, and ANZ surrendered 1.13% to $36.60.
The healthcare sector provided a rare bright spot, advancing 1.20% with CSL gaining 2.88% to $138.50, Sigma Healthcare surging 4.51% to $2.78, and Telix Pharmaceuticals climbing 2.74% to $12.75.
Market analysts attributed the sustained sell-off to growing anxiety over energy-driven inflation and anticipated monetary tightening. AMP’s Head of Investment Strategy Shane Oliver warned that soaring fuel prices, currently averaging $2.38 per liter in capital cities, could reduce household disposable income by approximately $103 monthly when combined with recent mortgage rate increases.
IG Market analyst Tony Sycamore noted that money markets now price in 67 basis points of additional rate hikes from the Reserve Bank of Australia by year-end, potentially elevating the cash rate to 4.85%—a level not seen since November 2008. This monetary policy trajectory aligns with hawkish responses from major central banks globally, including the US Federal Reserve and European Central Bank.
In corporate developments, Coles Group edged 0.75% higher to $21.59 after announcing more frequent fuel levy reviews, while Humm Group shares jumped 2.84% to $0.72 following regulatory review applications regarding takeover disclosures.