Home Uncategorized Australian shares fall sharply 1% at open, ahead of RBA meeting

Australian shares fall sharply 1% at open, ahead of RBA meeting

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Australian shares opened lower as investors price a rate hike by the central bank, acting in tandem with global peers to rein in soaring inflation, but consequently prompting a sell-off in stocks due to growth problems.

The ASX 200 was down 1.1% to 7,356 as of 10:23 a.m. AEST.

Shares on Wall Street closed sharply lower on Friday with the latest economic data and Amazon’s disappointing quarterly report and outlook highlighting soaring inflation.

The Dow Jones Industrial Average fell 938.99 points, or 2.77%, to 32,977.4, the S&P 500 lost 155.58 points, or 3.63%, to 4,131.92, and the Nasdaq Composite fell 536.89 points, or 4.17%, to 12,334.64.

The Nasdaq recorded its biggest monthly decline since October 2008.

Shares of Amazon closed 14% after the e-commerce giant delivered a disappointing quarter and outlook Thursday night, swamped by higher costs to run its warehouses and deliver packages to customers.

Stocks were under pressure after data showed monthly inflation rose the most since 2005, while US consumer spending rose more than expected in March amid strong demand for services.

Additionally, U.S. labor costs in the first quarter rose the most in 21 years, pointing to rising wage inflation, supporting the Federal Reserve’s policy tightening ahead of its scheduled meeting. this week.

Ian Lyngen, head of US rates strategy at BMO Capital Markets, notes that the data could lead to a more hawkish response from the Fed.

The pan-European STOXX 600 index rose 0.74%, but the MSCI gauge of stocks across the world lost 1.9%.

On the last trading day of April, the global index was on course for its biggest monthly decline since March 2020.

ABC/Reuters