Australian shares fall as RBA signals possible rate rise

Summarised from 2 outlets · Updated 21 Oct, 04:32 · Archive

Australian shares declined after the Reserve Bank's deputy governor suggested inflation remained a concern and a rate rise was possible.

The Australian share market declined on Wednesday after hawkish comments from Reserve Bank deputy governor Andrew Hauser suggested a rate rise remained possible. The S&P/ASX200 index fell 16.4 points, or 0.19 per cent, to 8800.5 at lunchtime, while the broader All Ordinaries dropped 18.5 points, or 0.21 per cent, to 8925.7.

Hauser told an investment conference in Sydney that the inflation outlook was 'materially worse' than the central bank had forecast, and that businesses were beginning to view 3.5 per cent inflation as the 'new normal'. Markets are pricing a 40 per cent likelihood of a rate rise at the RBA's next meeting on 3 November. Betashares chief economist David Bassanese said the RBA's comments indicated it had lost patience on inflation and was willing to risk recession to bring it down, and suggested market pricing of a rate rise was too low.

The tech sector fell 3.7 per cent, with data centre operator NextDC suffering the heaviest losses, down 38.7 per cent to an eight-year low of $5.63 after announcing power supply issues at its Melbourne site would cost $140 million in lost earnings. In mining, BHP dropped 1.1 per cent, Rio Tinto fell 1.4 per cent and South32 slipped 2.2 per cent, though goldminers Northern Star and Westgold rose 3.0 and 3.4 per cent respectively.

Australian shares fall as RBA signals possible rate rise — Image: Perth Now

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How it is being reported

Australian shares slip as RBA talks tough on inflationThe ASX was on track for its second day of losses after hawkish comments by a Reserve Bank official suggested that it might raise rates again.Perth Now · 21 Oct, 04:04
Australian shares slip as RBA talks tough on inflationThe ASX was on track for its second day of losses after hawkish comments by a Reserve Bank official suggested that it might raise rates again.The West Australian · 21 Oct, 04:03

In this story: Reserve Bank of Australia · Andrew Hauser · S&P/ASX200 · NextDC · BHP · Rio Tinto · Australia

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