SYDNEY: The Australian share market has opened more than one per cent lower after investors reacted to hints that the US Federal Reserve could soon raise its rates.
At the 10.15am (AEST) official market open, the benchmark S & P/ASX200 index fell 70.6 points, or 1.34 per cent, to 5193 points, while the broader All Ordinaries lost 66.1 points, or 1.25 per cent, to 5208.6 points.
The big four banks led the market down after US Fed vice chairman Stanley Fischer said at the weekend that factors that have kept inflation below target have probably begun to fade.
“That’s been taken by analysts to generally suggest, because he is an influential Fed member, to suggest that the Fed will look through short term inflation concerns when making a decision to hike interest rates,” CMC chief market strategist Ric Spooner said.
“The market reaction to that has been negative because there had been hopes the Fed would delay a rate rise beyond this year.”
IG market analyst Angus Nicholson said Mr Fischer’s comments had lifted the chance of a September rate rise to 38 per cent, with the probability of a December hike rising to 60.3 per cent.
Meanwhile, Rivkin Securities chief executive Scott Schuberg said Australian investors would again be sensitive to moves out of China.
