June 20, 2025 – Sydney:
Australian shares fell to their lowest level in two weeks during early trade on Thursday, weighed down primarily by a slump in mining and gold stocks, as cautious signals from the U.S. Federal Reserve and weakening commodity prices dented market confidence.
The S&P/ASX 200 index was down 0.2% at 8,516.2 by 00:39 GMT, marking its lowest point since June 4. The benchmark had already ended 0.1% lower on Wednesday, continuing its gradual decline this week.
Fed Signals Dampen Global Risk Appetite
Investor sentiment globally remained cautious following the Federal Reserve’s latest decision to hold interest rates steady, while leaving the door open for two rate cuts later this year. However, Fed Chair Jerome Powell tempered expectations by warning of persistent inflationary pressures, especially as consumers are likely to face higher prices due to the Trump administration’s upcoming import tariffs.
This hawkish tilt caused global equity markets to retreat and reinforced headwinds for commodity-driven economies like Australia.
“A more cautious Fed combined with inflation-fueling tariffs has left risk assets exposed,” said a Sydney-based investment strategist.
Miners Dragged Down by Iron Ore Slump
The mining sector lost 1%, hitting its lowest since May 2, as iron ore prices continued to fall amid weak steel demand in top consumer China.
-
BHP Group slipped 0.5%
-
Rio Tinto shed 0.1%
Gold stocks, often sensitive to rate expectations and dollar movements, dropped 1.7%, marking their lowest level since May 22 as gold prices weakened on reduced hopes of an imminent Fed pivot.
Energy Stocks in the Red Despite Oil Gains
In a paradoxical move, energy stocks fell 0.7% despite oil prices holding steady after a sharp rise earlier in the week.
-
Woodside Energy declined 1.2%
-
Santos Ltd fell 0.3%, though analysts say the stock remains under watch following a recent $18.7 billion takeover bid, which could trigger renewed investor interest in coming sessions.
- Iron Ore Prices Slide for Sixth Straight Session as China’s Property Woes Deepen
Financials Hold Firm
On the upside, the financials sub-index gained 0.3%, supported by a broad-based rise in the “Big Four” banks:
-
National Australia Bank (NAB) rose 0.7% despite being fined A$751,200 for consumer data right breaches
-
ANZ, Commonwealth Bank, and Westpac also notched modest gains between 0.2% and 0.5%
New Zealand Market Holds Steady on Q1 GDP Beat
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 was largely flat at 12,600.23. The Kiwi market was buoyed by stronger-than-expected Q1 GDP growth, which reduces pressure on the Reserve Bank of New Zealand (RBNZ) to deliver near-term rate cuts. Economists believe the positive surprise gives policymakers “more time to assess broader inflation and growth risks.”
