Bank rally helps Australia shares weather global equities selloff

Australian shares closed marginally lower on Thursday, with the S&P/ASX 200 index down 0.1 per cent at 8,719.70 points, according to Business Recorder. The benchmark had climbed back from earlier intraday lows as bank stocks gained, after weaker employment figures reduced bets on further interest rate hikes. That support helped cushion the impact of a broader global equity selloff.

Jobs fell unexpectedly in September while the unemployment rate stayed at 4.7 per cent, its highest in five years. Traders pared back the probability of a November rate increase to about 17 per cent from 32 per cent, and of a December rise to 23 per cent from 56 per cent. Three-year bond yields dropped to 4.800 per cent, their lowest in more than a month, and the financials sub-index gained 2.2 per cent to its best close since mid-August, led by a 3.3 per cent jump in Commonwealth Bank of Australia.

Global risk appetite weakened after US consumer inflation rose more quickly than forecast, lifting bets on Federal Reserve action later this year. Asian technology shares slumped, while South Korea's KOSPI sank 8 per cent and Japan's Nikkei lost nearly 5 per cent. Locally, the mining sub-index lost over 4.3 per cent as copper prices fell, while technology stocks hit their weakest finish since April.