Australian shares fall as banks weigh after RBA lifts rates to 18-year high

By Reuters News15 hours ago Updated

Nov 4 (Reuters) - Australian shares fell on Wednesday, with banks leading broad-based losses a day after the country's central bank raised interest rates to an 18-year high, while investors awaited the outcome of the US midterm elections.

The S&P/ASX 200 index .AXJO was down 0.5% at 8,844.20 points by 2327 GMT. The benchmark closed 0.3% higher on Tuesday.

Investors globally awaited the outcome of the US midterm elections, with polls indicating Democrats could regain control of the House while the Senate race remained closely contested.

Australian financials .AXFJ slid 0.7%, putting the sector on track for its worst session since mid-October. ANZ ANZ.AX led declines of between 0.4% and 1.2% among the "Big Four" banks.

Consumer-facing sectors including discretionary .AXDJ, staples .AXSJ and real estate .AXRE stocks each fell more than 0.5%, giving back some of the gains made in the previous session.

While the Reserve Bank of Australia raised rates by 25 basis points on Tuesday, its removal of a reference to further increases was interpreted by many as a sign the tightening cycle may be nearing an end. Even so, borrowing costs remain at their highest in nearly two decades, posing challenges for consumer-facing sectors.

Australian miners .AXMM fell 0.2% as weaker copper prices weighed on heavyweight stocks Rio Tinto RIO.AX, BHP BHP.AX and Fortescue FMG.AX, each down about 1%. MET/L

Healthcare stocks .AXHJ fell 1.1%.

The technology sector .AXIJ was among the few bright spots, advancing 1.4%, tracking a rebound in tech-heavy Nasdaq. .N

Energy stocks .AXEJ edged 0.3% higher after a sharp selloff in the previous session, even as oil prices extended losses overnight. Concerns lingered that recent attacks could undermine efforts to end the conflict between the US and Iran. O/R

New Zealand's benchmark S&P/NZX 50 index .NZ50 was largely unchanged at 13,721.75 points. The country's jobless rate rose to 5.7% in the third quarter, its highest level since 2015, data showed.