Australian shares have dipped, weighed down by mining and retail stocks, as traders await an expected rate cut from Federal Reserve policymakers to counteract a weak jobs market in the United States.
The S&P/ASX 200 Index fell 44.60 points, or 0.5 per cent, to 8833.1 as of midday AEST on Wednesday, with eight out of the 11 sectors in the red.
A quarter-point cut is anticipated when the Fed’s policy committee releases a statement at 4am AEST on Thursday, and projections from individual policymakers are expected to bolster expectations for another two similar cuts before the end of the year.
The S&P 500 slipped, though it held above 6600 points, while the Nasdaq Composite ended 0.07 per cent lower, snapping its nine-day winning streak.
“Wall Street paused ahead of the Federal Open Market Committee decision in what could prove to be the calm before the storm,” said Capital.com market analyst Kyle Rodda.
“The arithmetic is simple: the Fed needs to back up the dovishness currently discounted into the rates curve to keep stocks chugging along.”
On the ASX, Wesfarmers fell 2 per cent and Harvey Norman 2.2 per cent, while JB Hi-Fi edged 0.4 per cent lower, as the consumer discretionary sector fell 1.1 per cent overall.
This came despite consumer sentiment data released by UBS on Wednesday which indicated that spending intentions over the next 12 months had surged to the highest level since 2019.
The big miners also dragged the local bourse lower, with BHP and Rio Tinto both down 1.3 per cent, despite iron ore futures increasing 0.6 per cent to US$105.58 a tonne, as China’s daily steel output showed signs of improvement.
Investors also took profits from gold stocks, despite the price of bullion briefly rising above US$3700 an ounce for the first time ever. Northern Star fell 1.3 per cent, while Evolution Mining dropped 1.6 per cent, Perseus 2.1 per cent, and Newmont 1.3 per cent.
Energy stocks were mixed after oil finished higher, with the West Texas Intermediate for October up 2 per cent to $US64.56 a barrel as pressure mounted on Russia’s oil exports and tensions in the Middle East increased.
Woodside edged up 0.5 per cent, while Santos dipped 0.4 per cent. Beach Energy jumped 2.5 per cent and Karoon Energy 2.4 per cent.
“Ukrainian forces have intensified strikes on Russian energy facilities, with data starting to show depressed output,” said Westpac senior economist Pat Bustamante. “In addition, reports suggest Western nations are considering fresh sanctions in a bid to push President Putin to the negotiating table.”
The tech sector dipped, weighed down by Life360, which fell 2.4 per cent, Zip, which dropped 2.6 per cent, and Appen, down 2.8 per cent.
However, DroneShield gained 2.7 per cent after announcing it had won $7.9 million worth of fresh contracts with the US Defence Department.