Australian shares fell 42 points, or 0.5%, to 8,686 in early trade on Thursday, extending recent declines to their lowest level in a week. Sentiment was hit by a sharp sell-off on Wall Street after hotter-than-expected U.S. inflation data rattled technology stocks and rekindled expectations of further Federal Reserve rate hikes.
On the domestic front, September labour force data showed the unemployment rate holding at 4.7%, its highest level in nearly five years, as total employment unexpectedly declined. In China, Australia’s key trading partner, September consumer price growth accelerated but still missed market forecasts, while producer prices rose more than expected. At the same time, exports and imports both jumped to record highs, underpinning a strong trade surplus.
Sector losses on the ASX were led by technology, non-energy minerals, industrial services, and consumer durables. These declines were partially offset by gains in communications, consumer non-durables, and utilities. Heavyweight BHP Group dropped 3.8% even after it secured a deal to avert a strike at Chile’s Escondida copper mine. Other notable laggards included Goodman Group (-3.8%), Lynas Rare Earths (-3.7%), and Codan Ltd. (-3.4%).