On Wednesday, the Australian stock market suffered its third straight day of losses, with a decline in the local benchmark driven primarily by energy stocks.
Prior to the US Federal Reserve, the Bank of England, and the Bank of Japan making important rate decisions in the following 36 hours, the rate has decreased.
At closing bell, the S & P/ASX200 dropped 0.5% or 33.3 points to 7,163.3, while the All Ordinaries also dropped 0.5% or 33.1 points to 7.361.9.
Consumer Staples and Discretionary had slight gains but the other seven sectors on the benchmark finished in the red.
The worst-performing sectors were energy and materials, with iron ore kingpin BHP sliding 1.5% to $44.42 a share and LNG juggernaut Woodside falling 2.1% to $37.00.
In business news, Qantas stock fell 2.2% late in the trading session when it was revealed that the airline’s contentious former CEO Alan Joyce received a $21.4 million salary in the 2022–2023 fiscal year.
The national carrier, however, might be forced to return $2.2 million in short-term compensation if the ACCC determines that it violated competition laws.
Following the ex-dividend trading of its shares as of today, Flight Centre saw a 1.2% decline.
Scott Charlton, the departing chief executive of Transurban, has been named the new leader of Sydney Airport and is slated to start on December 1. As a result of the announcement, shares fell 0.4%.
Current-Pay-Later Stock After posting a good balance sheet in August, Sezzle increased by 20.8%.
Yields on US five- and 10-year bonds touched their highest levels since 2007 ahead of the Fed’s interest rate decision on Wednesday at 2pm EDT as markets anticipate the central bank will maintain its hawkish stance this year before starting to lower rates in 2024.
According to CMC Markets analyst Tina Teng, additional rate increases are imminent due to the US’s ongoing inflationary pressures.
“The Fed is expected to pause rate hikes this time, but is most likely to keep the hawkish stance as inflation showed a trend of re-acceleration in the past two months,” said Ms. Teng.
Before interest rates rise this year, “another rate hike may be on the table.”
Oil prices stabilised on Wednesday after reaching a 10-month high as markets assessed the possibility of increasing US oil production and global stocks maintained a cautious stance ahead of the round of central bank decisions.
Additional rate increases are soon to come, according to CMC Markets analyst Tina Teng, because of the US’s persistent inflationary pressures.
“The Fed is expected to pause rate hikes this time, but is most likely to keep the hawkish stance as inflation showed a trend of re-acceleration in the past two months,” claimed Ms. Teng.
Until interest rates climb this year, “another rate hike may be on the table.”
As markets assessed the likelihood of rising US oil production and global stocks maintained a cautious stance ahead of the round of central bank decisions, oil prices stabilised on Wednesday after touching a 10-month high.
This, however, is not anticipated in the near future. The US oil producer increased oil drilling as well, which might be a negative element for the oil market.
British annual consumer price inflation unexpectedly dropped to 6.7%, significantly below estimates of a 7% increase, according to official data, ahead of the Bank of England’s next meeting tomorrow.
However, it is anticipated that the UK’s central bank will increase rates for a 15th time tomorrow, putting the bank’s benchmark interest rate up to 5.5% from 5.25.
The People’s Bank of China kept its benchmark loan prime rates at 3.45% in a separate development.