29.01.202600:31:40UTC+00Australian Shares Extend Losses

The S&P/ASX 200 index fell by 0.5% to approximately 8,890 during Thursday morning's trading session, continuing its downward trajectory from the previous day. This decline was largely influenced by the performance of major banks and mining companies. Furthermore, inflation data that exceeded expectations has heightened the likelihood of an interest rate increase as soon as next week. Market predictions now suggest a more than 70% probability of a 25 basis point hike in the existing 3.6% cash rate, up from a 60% chance prior to the release of the data. Forecasts indicate that rates could reach 3.85% by May and potentially rise to approximately 4.10% by September. Sectors sensitive to interest rates experienced continued declines, with real estate stocks dropping 0.8% to reach their lowest point in eight months. The financial sector also faced a 0.2% decrease, notably with Commonwealth Bank, a leading financial institution, falling by 0.7%. Moreover, mining companies saw a 0.9% dip due to reduced iron ore prices. However, compensating for these declines, gold mining stocks increased by 0.9%, while energy sector shares rose by 0.8%, achieving a near five-month high. Whitehaven Coal experienced a significant rise of up to 4.35% following better-than-expected second-quarter output, driven by improved mining conditions and higher production volumes from its operations in Queensland and New South Wales.