FX.co ★ Australian Shares Dip as Tech Stocks Drag

The S&P/ASX 200 Index experienced a decline of 0.2%, settling around 8,840 in early trading on Wednesday, effectively erasing the gains made in the previous session. This setback mirrored a technology-driven downturn witnessed in Wall Street overnight. The market also felt the impact following the Reserve Bank of Australia's announcement to increase interest rates during its February session, prompted by faster-than-anticipated economic growth and a stubborn inflation outlook. The central bank's shift towards a rate-hiking cycle saw investors increase their expectations of a rate rise in May to 80%, with approximately 40 basis points of further tightening anticipated throughout the rest of the year. Local technology stocks were the hardest hit, plummeting over 7% to their lowest point since early February 2024, triggered by concerns of potential AI disruption affecting their U.S. counterparts. Specifically, Xero, a provider of accounting software, tumbled 14% to an over two-year low, whereas Wisetech Global, specializing in logistics software, decreased by 7%, marking its lowest point since January 2023. Sectors sensitive to interest rate changes, such as banks and real estate, also experienced declines. However, gains in stocks linked to commodities helped mitigate further losses.