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Australian shares slip on profit booking as benchmark gains for third week

By Reuters News

By Anjali Singh

Nov 13 (Reuters) - Australian equities closed lower on Friday as investors locked in profits from a rally this week after oil prices plunged to two-month lows, while geopolitical uncertainty weighed on sentiment.

The benchmark S&P/ASX 200 index .AXJO fell 0.7% to 9,082.20 points but closed the week 0.6% higher.

Investors took profits after the index rose to a two-month high earlier this week, said David Tuckwell, CIO at ETF Shares.

Global investment sentiment remained in flux throughout the week following Democrats' victory in the US midterms that stoked fears of greater AI scrutiny and the possibility of a weakened Donald Trump seeking a deal to end the eight-month-old Iran war.

In the same week, US retail inflation data for October came in hotter than expected, stoking fears of higher-for-longer interest rates.

Inflationary pressures and rising bond yields weighed on global equities, even as dip buying and lower oil prices earlier in the week had supported them.

The longer-term risks for bond yields remain to the upside, though, due to a combination of factors, including the oil shock and central bank rate hikes, AMP's Chief Economist Shane Oliver said in a report.

Short-term Australian government bond yields edged higher, with the 1-year yield at 4.961%. Yields on this part of the curve usually follow expectations for central bank rate moves.

Banks .AXFJ lost 0.4% on the day.

"Higher yields make richly valued, dividend-paying banks look less attractive, and tighter policy raises bad-debt risk," Tuckwell said.

Rate-sensitive real estate stocks .AXRE also fell 1.3%, while energy stocks .AXEJ lost 0.5%.

Heavyweight miners .AXMM slumped 1.6%, with BHP Group BHP.AX and Rio Tinto RIO.AX losing 1.3% each.

Gold miners .AXGD declined 2.5%, with Northern Star Resources NST.AX and Evolution Mining EVN.AX each losing nearly 3%.

Local technology stocks .AXIJ lost 0.8% on the day but gained over 2% on the week, defying a global AI-related sell-off.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.6% to 14,173.68 points.

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