The Australian share market recorded its third consecutive day of losses on Wednesday, with the local benchmark weighed down by a drop led by energy stocks.
The decrease comes ahead of crucial rates decisions from the US Federal Reserve, the Bank of England and the Bank of Japan in the next 36 hours.
The S & P/ASX200 fell 0.5 per cent or 33.3 points to 7,163.3 at the closing bell, while the All Ordinaries similarly fell 0.5 per cent or 33.1 points to 7.361.9.
Seven of the 11 sectors on the benchmark finished in the red, while Consumer Staples and Discretionary realised modest gains.
Energy and material stocks were the worst performing with iron ore giant BHP falling 1.5 per cent to $44.42 a share, while LNG heavyweight Woodside dropped 2.1 per cent to $37.00.
In company news, Qantas stocks dropped 2.2 per cent late in the trading session following news that the airline’s controversy-laden ex-chief executive Alan Joyce pocketed a $21.4 million salary in the 2022-23 financial year.
But the national carrier could clawback $2.2 million in short-term bonuses if it is found to have fallen foul of competition rules by the ACCC.
Flight Centre, dropped 1.2 per cent after its shares traded ex-dividend as of today.
Outgoing Transurban chief executive Scott Charlton has been announced as the future boss of Sydney Airport and is expected to commence in the role on December 1. Shares sank 0.4 per cent on the news.
By-now-pay-later stock Sezzle surged 20.8 per cent after reporting a strong balance sheet in August.
Ahead of the Fed’s interest rate decision on Wednesday at 2pm EDT, yields on US five- and 10-year treasuries hit their highest levels since 2007 as markets expect the central bank to remain hawkish this year before it begins curing rates in 2024.
CMC Markets analyst Tina Teng said a further rate increase was on the cars as inflationary pressures in the US proved persistent.
“The Fed is expected to pause rate hikes this time but is most likely to keep the hawkish stance as inflation showed a trend of re-acceleration in the past two months,” Ms Teng said.
“Another rate hike may be on the table before peaking its interest rates this year.”
After soaring to a 10-month high, the oil price steadied on Wednesday as global equities held a cautious tone ahead of the round of central bank decisions and markets assessed the prospect of increased US oil production.
“There will be a possibility for crude price to hit the $100 mark if OPEC+ continues output cuts while China offers positive signs of its economic recovery from the current turmoil for the rest of the year,” Ms Teng added.
“However, this is not expected in the near term. The US oil producer also ramped up their oil drills, which could be a bearish factor in the oil market.”
Ahead of the Bank of England’s next meeting tomorrow, British annual consumer price inflation data fell unexpectedly to 6.7 per cent, according to official data, well below expectations of a 7 per cent increase.
It is expected, however, that the UK‘s central bank will raise rates for a 15th time tomorrow, bringing the bank’s key interest rate to 5.5 per cent, up from 5.25 per cent.
Separately, the People’s Bank of China left its benchmark loan prime rates on hold at 3.45 per cent.