The S&P/ASX 200 closed at 8,978.4 points, down 88.3 points or 0.97%, a new 20-day low. Over the last five trading sessions the index has lost 1.64%.
The trigger was a fresh round of US strikes on Iran, which pushed oil higher and fed a global bond selloff. Brent futures rose 1.02% to US$95.59 a barrel. The Australian dollar slipped 0.21% to 71.45 US cents.
Miners take the hit
Resources stocks did the damage. Iron ore in Singapore fell 1.75% to US$97.75 a tonne. Capstone Copper dropped 8.89% to $14.96, and Silex Systems lost 8.57% to $4.80.
A few names went the other way. Graincorp climbed 69 cents, or 11.02%, to $6.92. Insurance Australia Group added 43 cents, or 5.46%, to $8.30.
Offshore markets
Wall Street ended lower, with the Dow down 0.8%, the S&P 500 down 0.7% and the Nasdaq Composite down 1%. In Europe the FTSE gave up 0.3%, the DAX 1.1% and the Stoxx 600 0.6%.
Rate hike talk
Local growth data added to the unease. New June quarter GDP figures stirred more talk of Reserve Bank rate rises. HSBC Australia’s chief economist, Paul Bloxham, said GDP and inflation have both surprised on the upside in recent weeks, with growth still running above the economy’s “speed limit.”
He now expects the RBA to lift its cash rate in September and again in the fourth quarter, taking it to 4.85%. HSBC had previously forecast no change. “We expect higher rates will now mean an even bigger housing correction, with a peak-to-trough decline of 13% (previously 8%),” Bloxham said. His view is that rate cuts will begin from the third quarter of 2027.
