Australian Shares Erase Yearly Gains Amid Rate Hike Fears

The S&P/ASX 200 Index erased all gains for the year following its fourth consecutive week of losses, declining 4.5 percent throughout September. The Australian sharemarket is expected to open flat or slightly higher on Monday as investors brace for further monetary tightening.

Market volatility stems from expectations that the Reserve Bank of Australia will implement a fourth interest rate hike this year to combat persistent high inflation. Some investors anticipate up to two additional increases beyond that fourth hike.

The local downturn contrasts with performance in the United States, where benchmarks have reached new highs. U.S. markets have been driven by a boom in artificial intelligence, falling oil prices, and lower bond yields, leaving the Australian market lagging behind global trends.