Australian shares moved lower on Thursday as weakness in mining and energy stocks weighed on the market, while investors remained cautious ahead of the release of key employment data that could influence the Reserve Bank of Australia's next policy decision.
The S&P/ASX 200 index fell 0.4% to 8,776.70 points in early trading after ending the previous session slightly higher. Market participants largely stayed on the sidelines as they awaited the May employment report, which could provide important signals about the strength of the labor market and the future direction of interest rates.
The Reserve Bank of Australia has continued to express concerns about persistent inflation. Following the release of May inflation data, Deputy Governor Andrew Hauser stated that the fight against inflation may not be over and that the central bank still has more work to do to bring price pressures under control.
Analysts at Westpac maintained their expectation that additional interest rate increases could be necessary. The bank projected another potential rate hike as early as August, citing concerns that elevated oil prices may continue to feed into consumer inflation in the coming months.
Mining companies led the market decline, with the sector falling 1.8%. Gold producers came under particular pressure as bullion prices dropped to their lowest levels in more than seven months. Evolution Mining and Northern Star Resources both posted losses as investors reduced exposure to gold-related stocks. The gold sub-index also extended its losing streak, marking a third consecutive day of declines.
Financial stocks weakened as well, with the banking sector falling approximately 0.7%. Australia's major banks recorded losses ranging from 0.6% to 2.8% as investors assessed the potential impact of higher interest rates on economic growth and lending activity.
Judo Capital Holdings experienced one of the sharpest declines on the market, with shares plunging nearly 40% after the business lender lowered its earnings outlook for 2026. The company cited higher provisions for potential loan losses, raising concerns about asset quality and profitability.
Energy stocks also moved lower, falling about 2% as Brent crude prices dropped to their lowest levels since February. Concerns surrounding Middle East supply disruptions have eased, putting downward pressure on oil prices. Woodside Energy and Santos both declined by roughly 2%.
Technology shares followed weakness in U.S. markets, as investors remained concerned about elevated valuations in the sector. WiseTech Global and Xero both posted losses during the session.
Meanwhile, New Zealand's S&P/NZX 50 index edged 0.2% higher, outperforming Australian markets and reflecting more stable investor sentiment across the Tasman.
Investors will now closely monitor Australia's employment data, as the results could significantly influence expectations for future interest rate decisions and determine the near-term direction of local financial markets.
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