FX.co ★ Australia Stocks Ease Further as New Week Opens

Australian shares fell 45 points, or 0.5%, to 9,218 in early Monday trading, extending losses into a second session. Sentiment weakened as U.S. stock futures declined amid rising doubts that Washington and Tehran will soon reach an agreement to reopen the Strait of Hormuz.

Caution also persisted ahead of the Reserve Bank’s policy decision later this week, with stubborn cost pressures clouding the outlook despite three interest rate hikes so far this year. Fresh data from key trading partner China added to the unease: July inflation eased to a six-month low, while producer prices registered their slowest gain in three months, both pointing to subdued demand.

Financials led the market lower, with the big four banks shedding between 1.4% and 4.6% after a softer-than-expected Q3 earnings update from Westpac. Insurers were also under pressure, including QBE (-2.3%), Insurance Australia (-2.5%) and AUB Group (-1.7%). Weakness broadened to consumer durables, commercial services and logistics.

Partially offsetting the decline, resource stocks provided some support, with BHP up 1.1%, Northern Star Resources gaining 1.8% and Evolution advancing 1.5%.