Australian stocks post sharpest fall since mid-December as financials, miners slip
By Anjali Singh
Jan 20 (Reuters) - Australian shares logged their worst session in over a month on Tuesday as rate hike jitters knocked heavyweight financials, while miners fell after BHP flagged that drawn‑out negotiations with China’s dominant iron ore buyer were pressuring prices.
The S&P/ASX 200 .AXJO closed 0.7% lower at 8,815.90 points, marking its steepest one-day decline since December 15, 2025.
Financials .AXFJ led the decline, sliding 1.1%. The big four banks fell between 0.9% and 1.8%.
The sector is losing steam as investors rotate out, said Philip Pepe, senior equities analyst at Shaw and Partners.
He added that weaker reinsurance pricing is pulling domestic premiums lower and rising rate hike expectations have unwound the gains banks made when markets were pricing in cuts.
Attention will now be on domestic labour force data, due on Thursday, and next week’s December‑quarter inflation print, seen as pivotal for the Reserve Bank’s rate trajectory.
The RBA is scheduled to meet on February 3, with the market now expecting a 30% chance expecting a rate hike, according to LSEG data. 0#AUDIRPR
The mining index .AXMM dropped 1.1%, with BHP Group BHP.AX sliding 2% to a one-week low.
Rio Tinto RIO.AX and Fortescue FMG.AX declined 2% and 0.6%, ahead of their quarterly production reports on Wednesday and Thursday, respectively.
Gains in gold miners, however, offered some relief, with investors piling into the safe‑haven metal after President Donald Trump threatened tariffs on several European countries over the weekend.
Gold miners .AXGD gained 0.4% to notch a lifetime high. Ausgold AUC.AX and Aurum Resources AUE.AX topped the charts, rising 6.3% and 5.6%.
Technology stocks .AXHJ rose 0.9% and the utility index .AXUJ added 1.6%, posting its sharpest intra-day rise in a month.
The New Zealand benchmark S&P/NZX 50 index .NZ50 ended 0.05% lower at three-week low of 13,573.93 points. Market now eyes local quarterly inflation print, due on Thursday. Markets imply almost no chance of a rise in the 2.25% cash rate on February 18. <0#NZDIRPR>
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