Benchmark index logs lowest closing level since October 13
Real estate falls 2.3%, consumer discretionary stocks down 4.2%
Lithium miners gain after JPMorgan’s upbeat price forecast
Updates to close
By Atharva Singh
Oct 30 (Reuters) - Australian shares fell for a third straight session on Thursday, dragged by real estate and consumer discretionary stocks, with investors scaling back expectations of an interest rate cut following hotter-than-expected third-quarter inflation data.
The S&P/ASX 200 index .AXJO fell 0.46% to close at 8,885.50 points, its lowest closing level since October 13. The benchmark shed nearly 1% on Wednesday.
Investors rotated out of real estate and discretionary stocks after a shockingly large inflation report dashed hopes of a Reserve Bank of Australia $(RBA)$ rate cut at its November 4 meeting. Swaps indicate less than 7% chance of policy easing next week.
Markets also promptly scaled back their rate cut calls for December and February. 0#AUDIRPR
Sentiment was further subdued by U.S. Federal Reserve Chair Jerome Powell's cautious tone over future policy easing.
"With rate cuts postponed and stagflation risks lingering, investors are leaning back into defensives with financials and staples set to attract flows as markets favour stability and cash-flow resilience over aggressive growth momentum," said Hebe Chen, market analyst at Vantage Markets.
Real estate stocks .AXRE shed 2.3% to extend losses for a second consecutive session, led by Goodman Group GMG.AX and Stockland Corporation SGP.AX, which fell 1.3% and 3.4%, respectively.
「This week’s abrupt pivot to a ‘no-cut’ stance has reignited risk-off sentiment toward property demand and refinancing pressure,」 Chen added.
Consumer discretionary stocks .AXDJ declined 4.2%, dragged by JB Hi-Fi JBH.AX, which hit a near three-month low after a sharp sequential drop in first-quarter sales growth.
Bucking the trend, energy stocks .AXEJ rose 1.3%, as oil prices held on to prior-session gains. O/R
Miners .AXMM advanced 0.5%, supported by strength in lithium stocks after JPMorgan raised its long-term spodumene price forecast.
Elsewhere, financials .AXFJ gave up early gains and fell 0.2%, while healthcare .AXHJ snapped a six-session losing streak to close up 1.9%.
New Zealand’s benchmark S&P/NZX 50 index .NZ50 gained 0.4% to finish at 13,459.29 points.
(Reporting by Atharva Singh in Bengaluru; Editing by Eileen Soreng)
((mailto: Atharva.Singh@thomsonreuters.com))