01.10.202601:22:16UTC+00Australian Shares Under Strain as October Begins

Australian shares dropped 119 points, or 1.4%, to 8,669 in early October trading, wiping out recent gains as Wall Street closed mostly lower overnight amid rising U.S. Treasury yields and weakness in financials and defensive sectors. Domestically, home values declined for a sixth consecutive month in September as transaction volumes slumped, with another expected rate hike this week forecast to trigger the sharpest housing downturn in three decades. Factory activity also contracted at its fastest pace in 21 months, weighed down by weaker new orders, higher costs, and softer demand.

Losses were broad-based, led by energy minerals, financials, healthcare, and logistics. Lynas Rare Earths slid 5.5%, Suncorp Group lost 5.1%, PLS Group fell 3.0%, and Ampol declined 2.5%. The four major banks also recorded notable falls. However, the sell-off was partly contained after RBA Governor Michele Bullock indicated September’s rate increase could be the last, following four hikes so far this year. Traders now await the release of August trade data later today.