Australian shares closed at their lowest level in nearly a month on Friday, with tech stocks leading the declines, as risk assets lost their sheen after global bond yields firmed on expectations of economic expansion and rising inflation.
The S&P/ASX 200 index ended 2.4 per cent lower at 6,673.3, marking its sharpest fall since Sept. 4, 2020. For the week, the index shed 1.8 per cent.
Yields on Australian and global bonds continued to rise, prompting the Reserve Bank of Australia to launch an unscheduled offer to buy three-year government bonds.
“The central bank’s monthly meeting on Tuesday will also be closely watched for comments on the volatility from the bond sell-off, but we don’t expect any major policy changes,” said Steven Daghlian, market analyst with CommSec.
Higher bond yields make equities look less attractive as they diminish the lure of stocks’ dividend payouts, and make debt servicing harder for companies.
Tech stocks dived 5.3 per cent and lost 12.8 per cent over the week, mirroring a downturn in their Wall Street peers, with fintech co Afterpay Ltd dropping 11 per cent.
Energy stocks skid 2.5 per cent, hurt further by a fall in oil prices.
Oil & gas explorers Woodside Petroleum and Oil Search lost 3.4 per cent and 2.1 per cent, respectively.
Miners fell 2.1 per cent despite higher metal prices, with BHP Group and Fortescue Metals Group shedding 2.6 per cent and 4.5 per cent, respectively.
Financials also slid, with the so-called “Big Four” banks falling between 2 per cent and 2.6 per cent.
Commercial explosives maker Orica was the biggest percentage loser on the benchmark index after it said the trade spat between Australia and China will hit its sales to thermal coal mining customers.
In New Zealand, the benchmark S&P/NZX 50 index snapped a six-session losing streak to end 0.7 per cent higher, helped by gains among utility and industrial stocks.
