Australia shares slip as banks and gold miners drag; inflation data in focus

Australian shares closed slightly lower on Friday, as investors booked profits in financials and gold miners following a rally earlier in the week, while waiting for local and US inflation data for monetary policy cues.

The S&P/ASX 200 index fell 13.8 points to close at 9,019.00.

The benchmark hit a record high of 9,115.20 earlier in the week, but has retreated since to end the week with marginal gains.

Caution prevailed as investors awaited Australia’s third-quarter inflation data due next week, seen as key to shaping the central bank’s monetary policy trajectory, while uncertainty over the US-China trade talks outcome also curbed risk appetite.

Financials fell 0.5%, with three of the “Big Four” banks ending lower.

ANZ Group led declines, slipping 1%.

“Bank stocks were irrationally exuberant for most of 2024 and in the first half of this year, and are likely to underperform going forward,” said George Kurian, portfolio manager at Oracle Investment Management.

Investors across the globe were awaiting the US September inflation report due later in the day for clues on the Federal Reserve’s policy path. Gold stocks dropped 1.6%, weighing on the broader market as investors locked in gains after a strong rally.

The sub-index has lost about 9% this week in its worst weekly performance since July 2022.

“The time to buy gold on an attractive risk-reward basis was about 18 months ago… but now, the risk-reward is poor in gold trade,” Kurian said. Newmont’s Australia-listed shares fell 4.4% after the company flagged lower cash flow for the fourth quarter due to higher spending.

Miners eked out nominal gains after trading in negative territory for most of the session.

The sector posted its first weekly loss after four straight gains. Energy stocks rose 0.3%.

The sub-index gained 5% for the week, snapping a three-week losing streak on the back of higher oil prices.

Woodside Energy climbed 1%, while Santos slipped 1.2%.

In New Zealand, the benchmark S&P/NZX 50 index rose p0.1% to 13,391.59.