FX.co ★ Aussie Stocks Finish Lower as Financials Drag

The S&P/ASX 200 index declined by 0.5% to close at 8,836 on Wednesday, following a record-high finish in the previous session. The downturn was primarily influenced by losses in the financial sector, spearheaded by Commonwealth Bank of Australia (CBA), a leading lender. Despite CBA's announcement of record annual cash earnings amounting to A$10.25 billion, the major banks tumbled by 2.6%, reaching a two-week low. This decline was attributed to concerns over high valuations and the impact of the Reserve Bank of Australia’s third interest rate cut this year. Specifically, CBA shares fell by 5.2% to their lowest level since mid-May, with analysts suggesting that the earnings results were exaggerated by unpredictable trading gains. Other major banks such as NAB and Westpac saw their shares fall by 2.5% and 1.8%, respectively. In contrast, the mining sector experienced a gain of nearly 1%, achieving its highest level since early October 2024, supported by a rise in iron ore futures following production halts in steel mills located in China’s Tangshan hub. Additionally, gold stocks rose by 1.5%, reaching a seven-week high, prompted by US inflation data that bolstered expectations for a rate cut by the Federal Reserve in September. On the economic data side, Australia’s annual wage growth remained stable in the second quarter, driven by increases in the public sector that led to a 0.8% rise in the wage price index.