FX.co ★ Australian Shares Drop After RBA Minutes

The S&P/ASX 200 index declined by 0.5%, settling around 8,754 on Wednesday, as gains were reversed following the release of the Reserve Bank of Australia's December meeting minutes. These minutes indicated that policymakers are considering a potential interest rate hike in 2026. RBA Governor Bullock expressed a hawkish outlook, suggesting that such increases might be warranted if inflation remains persistent. The financial sector put downward pressure on the index, with shares of the Commonwealth Bank of Australia dropping 0.6%, Westpac Banking Corporation decreasing by 0.7%, National Australia Bank also down by 0.7%, and ANZ Banking Group falling by 1.0%. These declines occurred amid concerns of stretched valuations and the potential impact of rising interest rates. Technology stocks experienced a pullback, with Xero losing 2.0% and WiseTech Global dipping by 0.2%. Nevertheless, the mining sector provided some support due to strengthening commodity prices, with Rio Tinto climbing 0.9% and BHP Group edging up 0.1% thanks to record-high prices for copper and gold. Overall, trading activity was muted as the Christmas holiday approached.