Australian shares recover after surprise jobs drop tempers rate-hike expectations

By Reuters News

- Australian shares reversed early losses and traded slightly higher on Thursday after data showed employment unexpectedly fell in September, easing expectations that the central bank would raise interest rates beyond their 15-year high.

The S&P/ASX 200 index .AXJO was up 0.1% by 0200 GMT, after falling 1% to a near two-week low earlier in the session.

Data on Thursday showed employment in Australia unexpectedly fell in September, while the unemployment rate remained at a five-year high.

Markets reacted by trimming the perceived chance of a November rate hike to about 10% from 32% before the data, while the odds of a December increase fell to 28% from 56%. 0#AUDIRPR

Yields on Australian three-year bonds, which are sensitive to monetary policy expectations, were down at over a month low of 4.807%.

Risk appetite took a hit after US data showed inflation remained stubbornly high, driven by a surge in energy prices, bolstering bets that the Federal Reserve would lean towards another rate hike later this month.

Australian miners .AXMM slid roughly 4%, putting the sector on course for its lowest close since July 20, as copper prices weakened. MET/L

Top miners BHP Group BHP.AX and Rio Tinto RIO.AX fell more than 4% each, while newly ASX-listed shares of Glencore GLEN.L, shed nearly 3.2%.

Adding to the pressure, IT stocks .AXIJ slipped 3%, tracking an overnight decline in tech-heavy Nasdaq, with software firm Xero XRO.AX down 3%. .N

Shares of WiseTech Global WTC.AX surged 6% earlier in the session after the Australian logistics software firm said the corporate regulator would take no action against founder Richard White and two employees after a probe into alleged trading.

Financials .AXFJ rose 2.4%, with all "Big Four" banks trading in the black.

New Zealand's benchmark S&P/NZX 50 index .NZ50 slipped 0.2% to 13,731.45 points.


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