Australian shares end lower for second day on rate hikes worries

Australian shares closed lower for a second straight session on Wednesday, as the country's growth slowed in the third quarter due to soaring inflation and rising rates, with investors worrying about the impact of likely rate hikes in the future.

The S&P/ASX 200 index XJO ended down 0.9% at 7,229.4 points.

The economy grew 0.6% sequentially in the September quarter, below Reuters' forecast as well as prior quarter's expansion. It faces more challenges as the Reserve Bank of Australia (RBA) remains steadfast in its view on more rate hikes.

Analysts at Barclays said in a note they expect the RBA may pause in February, when it meets for the first time next year to decide on rates, but deliver a quarter-point hike in March, taking the key cash rate to 3.35%.

"The softer-than-expected growth print on Wednesday supports our view that the RBA may want to wait to see more growth data before hiking into next year," the analysts said, adding they expect a 3.8% growth this year, and a material slowdown to 1.8% growth next year.

Brad Smoling, managing director at Smoling Stockbroking, meanwhile, is upbeat about the final-quarter growth outlook.

Among individual shares and sectors, banks led the losses, with the sub-index XFJ down 0.8%. All of the "Big Four" lenders declined, while financial conglomerate Macquarie Group MQG also slid 1.7%, tracking the broader mood.

Local energy stocks XEJ dropped 2%, with sector major Woodside Energy WDS losing about 1.7%.

Lifting the somber mood, miners XXMM and gold stocks XGD climbed. Miners gained 0.3%, with heavyweight Fortescue Metals FMG adding 2.6%.

Meanwhile, Australia's financial crimes regulator started civil proceedings against SkyCity Entertainment Group's SKC Adelaide casino on Wednesday with shares falling 1.1%.

New Zealand's benchmark S&P/NZX 50 index NZ50G ended the day 0.2% down at 11,610.99.