Australian stocks fall most in five months as strong growth data dims rate-cut hopes

Published on 09/03/2025 at 02:53 am EDT
(Updates to close)

• Benchmark index logs worst day since early April
• Banks, real estate and tech stocks lead decline
• New Zealand shares snap four-session winning streak

(Reuters) - Australian shares posted their worst session in nearly five months on Wednesday, as stronger-than-expected economic growth data dimmed expectations for further interest rate cuts.
The S&P/ASX 200 dropped 1.8% to 8,738.8 in its biggest fall since early April. The benchmark has declined more than 2.5% in the past four sessions of falls.
Data showed the Australian economy grew 0.6% in the second quarter, topping forecasts of a 0.5% gain and lifting the annual growth to its fastest pace in nearly two years.
The stronger growth figures come at a time when the central bank has maintained a gradual and cautious approach to policy easing, with rate cuts in February, May and August guided by quarterly inflation data.
Its focus has now shifted to the labour market, which is easing from full employment levels, albeit slowly.
The Reserve Bank of Australia is now expected to hold rates steady at its late-September meeting, with market swaps pricing in a nearly 90% chance of no change.
Market sentiment on Wednesday was hit by a mix of hotter-than-expected growth data dimming rate-cut hopes, renewed tariff uncertainty, and an overnight global selloff, said Grady Wulff, senior market analyst at Bell Direct.
After a strong August, the market took "a breather to reassess the macro outlook, fiscal 2026 opportunities, and now, events that look to muddy the waters again," she said.
Financials, which have gained over 9% so far this year, bore the brunt of the selloff, losing 2.8% on Wednesday in their worst session since April 7. The "Big Four" banks fell between 2.2% and 3.7%.
Real estate stocks slipped 2.4% to their lowest since August 6. Tech stocks and miners lost 3.9% and 1%, respectively.
Gold miners hit a record high before closing 0.2% lower.
In New Zealand, the benchmark S&P/NZX 50 index fell 0.4% to 13,074.81, snapping a four-session winning streak. (Reporting by Kumar Tanishk in Bengaluru; Editing by Subhranshu Sahu)

Sumber : Reuters